Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — TRADE

Airline Operators (Viability)

Mr. Dobson: asked the Minister for Trade when next he plans to meet the chairman of the Civil Aviation Authority to discuss the viability of airline operators.

The Under-Secretary of State for Trade (Mr. Iain Sproat): I meet the chairman of the authority at intervals to discuss this and other subjects.

Mr. Dobson: When the Minister next meets the chairman of the Civil Aviation Authority, will he draw to his attention the extreme reservations—indeed, the violent oppostion—expressed by the Association of British Travel Agents to the CAA licensing Freddie Laker Holidays? Will he accept that this concern is expressed by an organisation whose main function is to ensure that holidaymakers are not robbed by various cheapjack outfits and to ensure that such outfits do not start up in future?

Mr. Sproat: I am absolutely certain that Mr. Dent, as chairman of the Civil Aviation Authority, is all too well aware of the views of other travel agents and tour operators.

Mr. Robert Atkins: Does my hon. Friend recognise that many small, independent airlines have gone through the recent recession without subsidies, grants or any other assistance and have done very well during that time? What steps will he take to persuade the chairman of the Civil Aviation Authority, on a continuing basis, to be more reasonable in the authority's approach to granting licences to these small airlines?

Mr. Sproat: The chairman of the Civil Aviation Authority is, at this very moment, undertaking a review of his organisation. No doubt the extremely important question that my hon. Friend has put today is one that the chairman will be considering very closely.

Mr. Woolmer: If the Minister is anxious to help the viability of British airlines, will he stop trying to make British Airways sell off the profitable parts of its business? Will he look again at this apparent madness of deregulation in the British air industry, which already has excess capacity? Specifically, what is his assessment of the deregulation on the Glasgow route where all the signs are that, yet again, one airline is being helped at the expense of others, with the result that excess capacity is arising and that, sooner or later, more jobs will be lost and the airport industry will be made more insecure?

Mr. Sproat: The answer to the first part of the hon. Gentleman's question is "No, Sir". With regard to the second part, the British Midland route from Glasgow to

Heathrow has been extremely successful. I have not met a single passenger, as I visit Scotland rather more than the hon. Gentleman—and who does not think that the Government's decision is extremely wise.

Mr. Teddy Taylor: Does my hon. Friend recall that it is now almost two years since his predecessor said that, in consultation with the CAA, he was hoping to resolve all the problems about the rules for flying balloons? Will my hon. Friend take extraordinary steps, with his real zeal and enthusiasm, to sort out this long-standing problem, the uncertainty over which has put more than 200 Southend jobs at risk?

Mr. Sproat: My hon. Friend raises an extremely important problem. In arguing for a relaxation in the rules governing balloons and, indeed, banners, he is raising a vital matter for many sections of British industry. I can assure him that I and my colleagues in the Department of the Environment are giving urgent consideration to this matter.

Loyalty Arrangements

Mr. Colvin: asked the Minister for Trade if he will meet the General Council of British Shipping to discuss the draft European Community competition regulation on loyalty arrangements.

Mr. Sproat: Yes, Sir. I am writing to both the general council and to the British Shippers Council to invite them to discuss further the Government's proposals regarding the regulation.

Mr. Colvin: Has my hon. Friend seen the report in today's Financial Times that shipping faces its toughest year for 50 years? Does he agree that to proceed with a scheme to reduce the loyalty arrangements from 100 per cent. to only 70 per cent. at the present time is likely to deprive conference lines particularly of their high value cargoes, leading in the end to a further reduction in our Merchant Navy, to the detriment of both our trade and the defence of the nation?

Mr. Sproat: My hon. Friend does well to draw attention to the extremely difficult times through which our Merchant Navy is passing. However, I remind him that there is no compulsion on shippers to reduce their loyalty arrangements to 70 per cent. If shipowners give good value for money they can certainly keep the 100 per cent. arrangement.

Mr. Woolmer: What will the Minister tell the GCBS about the state of British shipping and what the Government intend to do about it? What other country is standing by and doing nothing to protect or help its merchant fleet? Our fleet was once the pride of the nation. What will the Minister do to stem the job losses and the outflow of shipping orders?

Mr. Sproat: I shall tell the hon. Gentleman what I am doing, not merely what I am going to do. Last week I saw the GCBS to discuss the matter and I also saw the National Union of Seamen. Tomorrow I shall be seeing the Merchant Navy and Airline Officers Association and I shall see the radio operators later this week. When we have had a chance to consider all their views we shall put together our own views on what should be done about an extremely difficult situation, which does not affect only the British fleet, but is a result of the world wide recession.

Mr. Higgins: Is my hon. Friend aware that those of us who have made a lifetime study of the shipping industry and have always felt that the advantages of competition are very strong believe, nevertheless, that the EC's doctrinaire attitude on the issue is misguided and that the conference system and loyalty arrangements have much to be said for them, from the point of view not only of the industry, but, in the long term, of the consumer? Will my hon. Friend take the toughest possible line with the EC?

Mr. Sproat: My hon. Friend states a widely held view. It is shared by the shipowners, but the shippers have a different view and it is in an attempt to reconcile the two views that I am calling a meeting with both groups.

Mr. Woolmer: Does not the Minister recognise that his "hands off" approach is not satisfying even his right hon. and hon. Friends who are ideologically committed to competition? When will the Minister tell the shipping industry that he will stop talking and start acting?

Mr. Sproat: A useful prerequisite of action is a discussion of the present situation. I do not think that anyone could do more than I am doing by consulting all the seafaring unions and the GCBS.

Balance of Trade

Dr. John Cunningham: asked the Minister for Trade what is his present forecast for the balance of trade for 1983, indicating separately his forecasts for the balance on invisible trade, visible trade in oil and visible trade in non-oil goods.

Mr. Ron Lewis: asked the Minister for Trade what is his present forecast for the balance of visible and of invisible trade for 1983.

The Minister for Trade (Mr. Peter Rees): It is not the practice to forecast at this level of detail. Such a forecast would be subject to too many uncertainties.

Dr. Cunningham: It will be obvious that I cannot thank the Minister for that particularly unhelpful reply. Is not the Minister seeking to disguise the likelihood that Britain will become a net importer of manufactured goods? Is not that a grave prospect for this country in our present economic crisis, and will the hon. and learned Gentleman tell us whether he regards the recent 12 per cent. devaluation of sterling as being of assistance to our seriously deteriorating trade balance?

Mr. Rees: I would not care to forecast the next year's figures with any confidence. The forecasts range from minus 0·6 per cent. from Cambridge, as one might expect, to plus 3·5 per cent. from the London Business School. I prefer to leave astrology to the Opposition.
As regards the 12 per cent. depreciation, we are entitled to ask whether the Opposition Front Bench is still enamoured of the idea of a 30 per cent. devaluation. That may be a recognition of what would inevitably follow from the arrival of a Labour Government at the seat of power. There is no "quick fix" for British industry by that route. However, I hope that our industry will take advantage of the recent depreciation of sterling to increase its exports still further.

Mr. Kenneth Carlise: Does my hon. and learned Friend agree that it is misleading to draw too detailed a conclusion from an analysis of our trading performance,

but that the overall balance is important? Does he also agree that our trade surplus has been one of the brightest spots of our economic performance over the past year?

Mr. Rees: I am grateful to my hon. Friend for reminding the House that it is likely that for 1982, as in 1981 and 1980, we shall have had record surpluses on our current account.

Mr. Archer: Does the Minister's coyness about giving figures have anything to do with the fact that the surplus about which he has spoken rests solely on the oil surplus and that that is the only cloak for the Government's nakedness? Is he content with the fact that manufacturing production has fallen to its lowest level for 15 years and is 18 per cent. below the level at the time when the Government took office? Do the Government accept that their policies may have something to do with that?

Mr. Rees: No, I do not. I remind the right hon. and learned Gentleman that our service industries make a considerable contribution to the surplus on our current account and that about 11·5 million of our fellow countrymen are employed in those industries.

Mr. Dorrell: Does my hon. and learned Friend agree that the proposals announced by the Leader of the Opposition at the weekend would result only in this country being insulated from its most important trading partners, which would lead to a deterioration in our economic prospects and more unemployment?

Mr. Rees: My hon. Friend is right to remind the House that the Leader of the Opposition stated at the weekend that the present free trade system is a major obstacle to world recovery. Apart from his cavalier disregard of the interests of British exporters and consumers, the right hon. Gentleman's memory presumably extends back to the 1930s, when retaliatory protectionist measures of the type that would inevitably follow from his policies resulted in a drop in world trade of about 40 per cent. in three years, with disastrous unemployment consequences.

Manufactures (Imports)

Mr. Spearing: asked the Minister for Trade if he will state the actual and estimated figures of United Kingdom imports from, and exports to, the rest of the European Community of manufactures for the year 1982.

Mr. Peter Rees: In the 11 months January to November 1982 United Kingdom exports of manufactures to other EC countries totalled £12·7 billion and imports were £l7·2 billion. Figures for the whole year will not be available until the publication of the December trade figures.

Mr. Spearing: As the figures for the whole year will be even worse than the deficit of £5 billion in manufactured goods that the Minister has announced, is it not clear that the forecasts of positive and substantial benefits to trade, which were made in the Government White Paper on the European Community in 1971, are proving to be wrong and that the "substantial" benefits are negative? Does that not mean that the burden of the CAP is not offset by any advantage and that we should negotiate to leave the Common Market at once?

Mr. Rees: No such conclusion should be drawn from the hon. Gentleman's spurious analysis. He conveniently overlooks the considerable surpluses in our trade in invisibles and oil with the EC.

Mr. Squire: Does my hon. and learned Friend agree that as the Community covers a range of trades it is unlikely that singling out one item would provide a good or bad reason for membership?

Mr. Rees: I agree with my hon. Friend that the analysis of the hon. Member for Newham, South (Mr. Spearing) was extremely limited and misleading.

Mr. Archer: Does the Minister agree that this may not be the appropriate time for the Government to embark on staff cuts of 25 per cent. at the British Overseas Trade Board, apparently with a view to ending the sponsoring of outward trade missions? Does he believe that in such circumstances British exporters can compete with foreign producers whose Governments do not bear their misfortunes with such fortitude and who regard export drives as their business?

Mr. Rees: I am satisfied that, as our trade figures demonstrate, we give adequate support to British exporters.

Sir Anthony Meyer: Is not the coverage of imports by exports very much better with the EC than with any of our other industrial trading partners? Can my hon. and learned Friend explain how the establishment of a free trade area, instead of a common market with the EC, would help to resolve our problems?

Mr. Rees: I am entirely unable to follow the consequences of the policies on the EC apparently propounded by the Labour party.

Mr. Deakins: In what way, if any, has our total trade in manufactured goods benefited as a result of entry into the EC, and in what way will it benefit with continued membership?

Mr. Rees: I am unable to understand why the hon. Gentleman should overlook, as many of his hon. Friends have, our trade in oil products and services which give—

Mr. Spearing: Jobs. That is the answer.

Mr. Rees: —an entirely different picture. I remind the House of the figure that I gave in reply to an earlier question, when I said that about 11·5 million of our countrymen are employed in service industries.

Doorstep Selling

Mr. Greville Janner: asked the Minister for Trade whether he will introduce legislation to give a right to doorstep buyers to return goods within three days of the purchase thereof, and thereupon to be reimbursed of the purchase price.

Mr. George: asked the Minister for Trade if he will introduce legislation to protect consumers from doorstep selling.

The Minister for Consumer Affairs (Dr. Gerard Vaughan): At present a person who signs a hire purchase agreement on the doorstep can cancel the agreement up to three days after receiving a copy of the agreement through the post. I am proposing shortly to lay an order extending this to five days for all credit sales.

Mr. Janner: I welcome that announcement, belated though happy, but ask the Minister whether he will now extend the rules, by new legislation, extending cooling-off periods for those who buy from doorstep salesmen for cash, bearing in mind that evil minority of such salesmen who, by confidence tricks and pressures, cause people to enter into cash sales on their own doorsteps.

Dr. Vaughan: I am glad that the hon. and learned Gentleman welcomes the earlier announcement. However, the majority of abuses are in hire purchase and not in cash sales. That is why I am taking action to tighten up hire purchase agreements.

Mr. George: Does the Minister agree that the abuse of consumer production law with regard to the purchases of cash goods from doorstep salesmen is considerable and appalling? Will he bring about some changes, and have some discussions with crime prevention officers about one type of gross abuse by doorstep salesmen—the selling of security goods such as burglar alarms, often to very gullible purchasers?

Dr. Vaughan: I am prepared to look into this matter. As I said to the hon. and learned Member for Leicester, West (Mr. Janner) on 20 January, I am looking at doorstep selling in the general context of fairer trading We are having discussions in Europe on a directive that would include cash sales. We are of the view that Britain has much to contribute to the views on doorstep selling, and I shall be watching the directive carefully.

Counterfeit Products (Taiwan)

Mr. Canavan: asked the Minister for Trade what recent representations he has received about the import of counterfeit products from Taiwan; and what further action he intends taking.

Mr. Peter Rees: In the past six months we have received only one direct representation about imports to the United Kingdom of counterfeit products from Taiwan. We urge British companies to secure protection for their products by registering their patents, trademarks and designs in Taiwan. Although like most Governments we do not have diplomatic relations with Taiwan, the authorities there are fully aware of our concern. Stricter measures were announced in Taiwan in August 1981 to govern trademark offences. Recently much stiffer penalties for convicted offenders have also been announced in Taiwan. In addition, my Department will soon be setting up an anti-counterfeiting unit to strengthen its handling of such problems.

Mr. Canavan: When will the Minister take effective action to deal with complaints from Smith and Wellstood, which recently won a victory in Holland in its efforts to stop the sale of cheap Taiwanese imitations of its solid fuel heating stoves, only to find that the counterfeit stoves could still be sold in other countries such as Belgium? In view of the jobs involved in Bonnybridge in my constituency, will the Minister tell the Taiwanese authorities that if this malpractice does not stop he will impose a trade boycott on Taiwan?

Mr. Rees: As I said, we do not maintain diplomatic representation in Taiwan, but if the hon. Gentleman feels that any particular details in the Smith and Wellstood


case—which is well known to my Department—need further consideration, I should be delighted to receive him and representatives of the company.

Mr. Stanbrook: Has my hon. and learned Friend seen the report in The Times on Saturday of the confiscation in Nigeria of millions of pirated books, including many English titles, allegedly from Taiwan? Is it not the case that this is causing loss to the British book publishing industry of about £40 million to £50 million a year? If so, will my hon. and learned Friend inquire into this and do something about it?

Mr. Rees: It is because of the concern that both I and my hon. Friend the Minister for Consumer Affairs feel about this that we are setting up the anti-counterfeiting unit.

Mr. Cryer: Is the Minister satisfied that the measures taken both in Taiwan and by his Department will stamp out, for example, the type of counterfeiting that a group of Members of Parliament found, when worsted cloth was being labelled "Made in Huddersfield"? Will the hon. and learned Gentleman endeavour to do something to stamp that out?

Mr. Rees: The House will recognise that it is not easy for us to stamp out counterfeiting of this type in foreign countries. However, our aim is certainly that it should not penetrate to the United Kingdom market.

Mrs. Kellett-Bowman: While I accept that counterfeiting can be a serious problem, may I point out that lack of knowledge is also a serious problem? In view of his reply to question 6, will my hon. and learned Friend continue pressing his colleagues in the European Community to establish a uniform system of origin marking, with proper policing, so that this gives some security to the producers of textiles, and also gives consumers a knowledge of what they are supposed to be buying?

Mr. Rees: My hon. Friend will appreciate that origin marking can be used as a means of preventing the free circulation of goods inside the European Community. Subject to that reservation, we are in favour of introducing such a system into the United Kingdom.

Mr. Archer: Is this not just the type of instance where international regulation of trade should be at its best? With regard to what the hon. and learned Gentleman said a few moments ago about free trade, is not the present free trade system based on the assumption that all Governments alike should renounce responsibility for their respective economies and leave them to the free market forces? Is not that precisely what has brought about the present world recession, about which the Government are always talking?

Mr. Rees: I am afraid that the right hon. and learned Gentleman has not applied himself long enough or deeply enough to this problem. If he had he would realise that free trade is not incompatible, for example, with our own trade mark and copyright legislation.

Aircraft Noise (West London)

Mr.Greenway: asked the Minister of Trade if he will hold local consultations concerning the level of aircraft noise in Ealing and west London; and if he will make a statement.

Mr. Sproat: No, Sir. Adequate consultation facilities already exist through the Heathrow airport consultative committee. I am satisfied that the interests of all those affected by aircraft noise in Ealing and west London are adequately represented.

Mr. Greenway: Is my hon. Friend aware of the continual and severe suffering of my constituents from aircraft noise, including military and civil helicopter noise and pollution? May I ask him to use all his best efforts to reduce it? Is my hon. Friend aware of any plans for an expanded use of Northolt airport for civil aircraft? Is he aware that the community would be opposed to such an expansion?

Mr. Sproat: With regard to the first part of my hon. Friend's question, his constituents could not have a doughtier fighter in their cause than himself. I shall certainly do everything that I can. With regard to Northolt, that is a question for my right hon. and hon Friends at the Ministry of Defence, but I can tell my hon. Friend that consultations are going on between them and the British Airports Authority and its chairman, Mr. Payne, with regard to business aviation.

Mr. Jay: Could not the Government at least assist the people of west London by not building a fifth terminal at Heathrow airport?

Mr. Sproat: The right hon. Gentleman has been a member of the House long enough to know that it would be improper for me to make any further comments about the fifth terminal at Heathrow while the present inquiry continues.

Mr. Haselhurst: Can my hon. Friend confirm that, with the introduction of the Boeing 757 into service next month, another step will be taken in the direction of diminution of noise in the vicinity of Heathrow?

Mr. Sproat: That is a good point. There is no doubt that the newer generations of aircraft are much quieter. This will have a profound effect on the problems mentioned by my hon. Friend the Member for Ealing, North (Mr. Greenway).

Video Cassettes

Mr. Timothy Smith: asked the Minister for Trade if he will estimate the annual value of the illegal trade in video cassettes.

Mr. Sproat: As my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) said in moving his own Bill last Friday, the trade and the British Videogram Association estimate the total retail value of pirate video cassettes sold in the United Kingdom at about £100 million a year. This represents, in terms of numbers of pre-recorded video tapes, about 65 per cent. of the market.

Mr. Smith: Is my hon. Friend aware that one company alone—Thorn-EMI—on its own reckoning is losing between £15 million and £20 million of business a year? In the light of that information, was not the Second Reading of the Copyright (Amendment) Bill on Friday most welcome? Will the Government do all they can to ensure that the Bill has a speedy passage through both Houses of Parliament?

Mr. Sproat: Yes. The House, the trade and the whole country owe my right hon. Friend the Member for


Bournemouth, West a considerable debt. In general, the Government very much support the approach that my right hon. Friend adopted in that Bill.

Mr. Straw: Although I accept what the Minister said about the need for the strongest possible enforcement of the law against the pirating of video cassettes, does accept that in the longer term the trade can assist itself by ensuring that on the whole, pre-recorded items are sold on video discs, which cannot be copied, rather than on video cassettes?

Mr. Sproat: In this area I am afraid that making any judgment about the swift advance of technology is extremely rash. That may be the position at the moment, although I cannot confirm it or otherwise. But we have to be aware that in few other areas is technology moving as fast as it is here. However, the hon. Gentleman's comments will be taken into consideration.

Mr. Stokes: Is my hon. Friend aware that last Friday I visited one of the largest distributors of video cassettes in the country, which is situated in my constituency? This new firm was started by four young men aged about 25. It has a turnover of about £4 million and now employs nearly 50 people. Is my hon. Friend aware that if it were not for this piracy and illegal action it could employ many more than that number?

Mr. Sproat: My hon. Friend makes an extremely important point. Indeed, I can add to his experience. I understand that in the last two years alone video cassettes have given employment to about 20,000 people. This is just the kind of advanced technology that the House and the country most want to support.

Mr. John Fraser: As the Minister knows, the Opposition supported the Bill last Friday. What discussions have there been between Trade Ministers, the Home Office and the Metropolitan Police about enforcing the law? As the House recognises, the trade in illegal video cassettes is not far removed from other forms of organised crime.

Mr. Sproat: The hon. Gentleman is correct. We have been having close discussions with the Home Office, and these will be reflected in our approach to the Bill introduced by my right hon. Friend the Member for Bournemouth, West when it reaches its Committee stage.

Hong Kong

Mr. McNally: asked the Minister for Trade if he will make a statement on the policy of Her Majesty's Government towards trade relations with Hong Kong following his recent visit there.

Mr. Peter Rees: My visit was designed to reinforce the Government's policy of maintaining and improving trade relations with Hong Kong.

Mr. McNally: Is the Minister aware that increasingly in the next 10 or 15 years Hong Kong's magnificent trading performance will be overshadowed by political uncertainties? Will he make sure that that is in his mind and those of his officials when dealing with Hong Kong's trade practices? Will the hon. and learned Gentleman also make sure that the People's Republic of China is aware that it could well destroy a goose that lays golden eggs for it if it created a mood of uncertainty about Hong Kong?

Mr. Rees: It is this Government's intention to maintain and promote the stability and prosperity of Hong Kong.

Mr. Foulkes: Has the Minister read the report of the Adam Smith Institute which predicts that 20 per cent. of world trade will go through free ports such as Hong Kong by 1985? Since there are no free ports in the United Kingdom, is the hon. and learned Gentleman not worried that the working party set up by the Chancellor of the Exchequer has been hijacked by Customs and Excise? What action is he or the Secretary of State taking to make sure that the Under-Secretary of State, the hon. Member for Aberdeen, South (Mr. Sproat), who is in favour of free ports, is not summarily kicked off that working party?

Mr. Rees: No such outcome is likely. The question is a matter primarily for my right hon. and learned Friend the Chancellor of the Exchequer, but I can assure the House that there will be a useful and constructive input from my Department and, I am sure, from my hon. Friend the Under-Secretary of State.

Manufactures (Imports-Exports)

Mr. Ioan Evans: asked the Minister for Trade what is the percentage change in the seasonally adjusted volume of manufactured imports and of manufactured exports since May 1979 to the latest available date.

Mr. Peter Rees: Between May 1979 and November 1982, imports of manufactures rose by 2 per cent. and exports fell by 10 per cent.

Mr. Evans: Since joining the Common Market we have lost 2 million manufacturing jobs, and the position has deteriorated particularly since 1979. What is the Department doing to make contact with the Department of Industry and the Treasury to try to revive our manufacturing sector?

Mr. Rees: The hon. Gentleman overlooks, for example, the fact that our unit labour costs are rising by only about 5½ per cent., which is far below that of our major competitors. Productivity is up by 13 or 14 per cent. since 1980 and, again, is rising faster than that of our continental competitors. I am confident of British industry's ability to acquit itself well.

Mr. Bill Walker: Does my hon. and learned Friend agree that one of the sadnesses is that our traditional industries have declined? I exclude from that statement the Scotch whisky industry, which has had a remarkable export record. If all the other traditional industries had adapted to meet the changing demands of consumers abroad, they could probably have had a similar record.

Mr. Rees: I am happy to pay tribute to the remarkable export record of the Scotch whisky industry.

Mr. Archer: In view of those devastating figures, do the Government now acknowledge any responsibility for the fact that last year showed a total of more than 12,000 company liquidations—the worst year ever recorded? Is this the Government who fought the last election on the promise to care for small businesses? How does it accord wth the promise of the Prime Minister at Darlington during the last election campaign, when she said that the Labour party
are the party of unemployment. We are the party of opportunity"?

Mr. Rees: The right hon. and learned Gentleman should cast his mind back and note that every Finance Bill introduced by this Government has done something for small businesses and the formation of new enterprises.

Exports (Statistics)

Mr. Knox: asked the Minister for Trade if he will list the 12 countries that took most British exports in the most recent year for which figures are available.

Mr. Peter Rees: In the 12 months to November, the United States of America was the biggest market for United Kingdom exports, followed by the Federal Republic of Germany, Netherlands, France, the Irish Republic, Belgium and Luxembourg, Italy, Sweden, Saudi Arabia, Nigeria, South Africa and Switzerland.

Mr. Knox: Will my hon. and learned Friend confirm that all the European Community countries except Greece and Denmark are included in that list? Is there any guarantee that we should still be able to sell as much to those countries if we were outside the EC?

Mr. Rees: There is no guarantee whatever. Nor is there any guarantee that, for example, American non-oil investment would continue at its present rate in the United Kingdom rather than in the continental countries of the European Community.

Mr. Dobson: Was it a direct objective of Government policy that Britain should become a net importer of manufactured goods, or is it just an accident?

Mr. Rees: It was not a direct element of the United Kingdom's Government's policy. But I remind the hon. Gentleman, as I have reminded the House in other contexts, that we are a net exporter of oil and of services.

Balance of Trade

Mr. Alton: asked the Minister for Trade what is the latest available monthly figure for the United Kingdom balance of trade and the corresponding figure 12 months ago.

Mr. Peter Rees: The current account of the balance of payments in November 1982 was in surplus by £700 million, compared with £108 million in November 1981.

Mr. Alton: Will the Minister confirm that that increase is due primarily to our increased oil revenue and that during the past 12 months the balance in manufacturing industry has declined by one-third?

Mr. Rees: No, I will not confirm that, but I will confirm that the increase was due to rather low figures in November 1982. Perhaps that provides a rather unusual answer to the hon. Gentleman's question, which he may not have expected.

Mr. Campbell-Savours: Does the hon. and learned Gentleman accept that there is a difference between planned trade and the unilateral introduction of protectionist policies, which are the last stand of the free trader?

Mr. Rees: I have never understood either of those two formulations, which I suspect come from the fevered minds of those in the Labour research department.

Mr. Adley: As the Opposition seem keen to remind my hon. and learned Friend of past events, may I draw his attention to the 1964 general election and the fact that the

right hon. Member for Huyton (Sir H. Wilson) fought it on the slogan of "An £800 million deficit"? Will my hon. and learned Friend ask the Opposition what they would produce as a slogan for a Government who have been able to produce a £700 million surplus in one year?

Mr. Rees: I suspect that their slogan would be a 30 per cent. devaluation.

Dr. John Cunningham: Is the Minister aware that, in spite of his bluster from the Dispatch Box today, the CBI is forecasting a fall in new orders, particularly in new export orders? Against that background, and of evidence from firms that have improved their efficiency, cut their costs to the bone and paid wage increases below the rate of inflation, how does he expect British exporting manufacturing industry to survive?

Mr. Rees: As I said at an earlier point in these exchanges, I am not here to trade forecasts with the Opposition Benches, because there are many and various such forecasts. I have noted the CBI's figures. I have also noted the Industry Act figures for November. The House will recall that the Chancellor of the Exchequer, who has access to the best possible information, thinks that possibly the Industry Act figures in November were a little gloomy.

Mr. Marlow: Is it not right that the CBI figures were put forward before the change in the exchange rate, particularly against the franc and the deutschmark, and, since that change has come about, are not the prospects for our manufacturing industry with regard to exports much healthier than they were before?

Mr. Rees: It is possible that with its renewed competitiveness, British industry will be able to take advantage of the depreciation of the pound. The Opposition Front Bench may not have noticed that there has been a depreciation against the yen of about 18 per cent., which may possibly make a difference to our prospects in Japan.

Visible Trade (Balance)

Mr. Woolmer: asked the Minister for Trade what was the balance of visible trade in goods other than oil in 1978, and in the latest 12-month period.

Mr. Foster: asked the Minister for Trade if he will state separately the balance of non-oil and of oil visible trade for the latest 12-month period.

Mr. Peter Rees: In 1978 the non-oil balance was in surplus by £442 million and the oil balance was in deficit by £1,984 million. The non-oil balance for the 12 months to November 1982 was in deficit by £2,390 million, while the oil balance was in surplus by £4,283 million.

Mr. Woolmer: Do not those figures show the enormous benefit that the Government have derived from oil and the devastation that the country and industry have suffered as a result of the total mismanagement by the Government of the benefit that oil should have given our industry and economy? How have the Government managed to squander a national asset of oil and to so devastate our manufacturing industry that it will not be there to rescue the economy when the oil begins to run out?

Mr. Rees: I would be the last to underestimate the contribution made by oil to the fortunes of this country,


but to talk about the devastation of British industry is to underestimate the volume of British exports, which demonstrates that we still have a sound, leaner and more competitive industry to face the years ahead.

Mr. Dorrell: Does my hon. and learned Friend agree that some of the fastest growing markets for manufactures in the world are to be found in the newly industrialising countries in the Far East, precisely the countries from which the Opposition are so keen to insulate this country?

Mr. Rees: I entirely agree that the growth rate of the ASEAN countries is enviable, and they are markets in which British exporters distinguish themselves.

Mr. Stoddart: Does the Mininster realise that he is guilty of an attitude of disgraceful complacency towards British manufacturing industry? Is he aware that North Sea oil has a finite life and that by the time the Government have finished, and North Sea oil begins to run out, British manufacturing industry will be completely destroyed?

Mr. Rees: I do not know on what possible evidence the hon. Gentleman could make that assertion.

Mr. Kenneth Carlisle: Is my hon. and learned Friend aware that the majority of manufacturers in this country want us to remain in Europe, where our biggest market is, and that despite the roughness of conditions they do not want us to drift towards trade protectionism, because they know that their future lies in free trade?

Mr. Rees: As a country that exports 30 per cent. of its gross domestic product, we certainly believe in a free but firm market.

Mr. Spearing: Does the Minister agree that although exports of services and oil add considerably to the surplus that he announced just now, in terms of manpower costs and employment per £1,000 of exports they are very small indeed compared with manufactured goods, and that the deficit in manufactures which he also announced is therefore related to unemployment in this country?

Mr. Rees: The hon. Gentleman's proposition might be true of our oil exports but it is certainly not true of our invisible export service industries, which are labour-intensive.

Advertising (European Community Directive)

Mr. John Fraser: asked the Minister for Trade what progress has been made in negotiations on the European Community draft directive on advertising.

Dr. Vaughan: Discussions are still continuing in Brussels on this directive. Our aim is that it should be compatible with our own system of self-regulation.

Mr. Fraser: Why do these things take so long, when, about three years ago, we had virtually reached agreement with the Commission about the terms of the directive, which would leave the Advertising Standards Authority largely in the present position, but with a legal back-up? Why is it not possible to move faster in these matters, instead of spending, as in the direct selling directive, up to six years of negotiations while we delay doing anything in this country?

Dr. Vaughan: I do not accept that these things are taking so long. We have speeded up a great deal since the Labour Government were in office. In Europe we are

pursuing a policy of self-regulation wherever possible, and my Department, instead of waiting for European directives to come to us, is now going into Europe and pursuing British policies in that direction.

Package Tours (Advertisements)

Mr. Gwilym Roberts: asked the Minister for Trade if he will take steps to protect holidaymakers from misleading advertisements for package tours; and if he will make a statement.

Dr. Vaughan: The ABTA code, which was developed in consultation with the Director General of Fair Trading, requires brochures and advertising issued by ABTA members to contain clear, comprehensive and accurate information. This offers the holidaymaker a considerable degree of protection.

Mr. Roberts: Does the Minister accept that, in spite of the good work done by ABTA, there are many holidaymakers who are still disappointed when the reality of the holiday in many ways does not live up to the dream? As there are probably 5 million Britishers whom operators hope will travel overseas towards the sun this summer, is it not important that something further is done to protect those people?

Dr. Vaughan: I sympathise with what the hon. Gentleman says about holidays that have gone wrong, and I hope that what he says is not based on personal experience.

Mr. Roberts: Not at all. I stay in this country.

Dr. Vaughan: The answer for holidaymakers is to go to reputable companies, which obey a code of conduct and have safeguards for the customer.

Mr. Squire: Does my hon. Friend accept that there is concern on both sides of the House, not only about holidaymakers, but about the general matter of payments in advance for services and goods? Will he continue to bear that in mind in considering the Cork recommendations in this connection?

Dr. Vaughan: Yes, we are well aware of that. I hope that with the discussions going on we shall not have to wait for the whole of Cork to be put into legislation, but will be in a position to pull out some action to deal with the current abuses.

Mr. Dobson: If the Minister has time, will he turn his attention to the present television advertising by Sir Freddie Laker? Will he say whether he believes that those advertisements are telling the truth when Sir Freddie Laker says that people's money is safe with him? Will he confirm that he would have said this last time Sir Freddie made personal advertisements, despite the fact that that occurred between the time when the Civil Aviation Authority had warned Ministers that that company was at risk and before the company went bust?

Dr. Vaughan: I always have time to take note of what appears in advertisements, because it is important that customers should not be misled. If the hon. Gentleman has some additional special points to put to me, I should be happy to look at them.

Mr. John Fraser: As no one has outbankrupted the Laker holiday company, is it right that someone should be allowed to go back into the trade so easily after such massive losses in the conduct of the business?

Dr. Vaughan: As the House knows, we are considerably concerned about this kind of action. On the other hand, we practice a free market, and it would be difficult to legislate against that at the moment without handicapping genuine honest traders.

Merchant Fleet

Mr. James Johnson: asked the Minister for Trade if he intends to introduce new measures to reduce the decline in the British merchant shipping fleet.

Mr. Sproat: I am considering what can sensibly be done to assist the shipping industry through a difficult period and help stem the decline of the United Kingdom fleet, and have already set in hand an examination of costs connected with the transfer of ships to United Kingdom registry. The tasks of maintaining and improving international competitiveness and meeting the competition must lie primarily with the industry itself.

Mr. Johnson: Does the Minister mind if I tell him that workers and management in the docks say that they seem to listen to nothing but endless talk on this subject? Will he say in what fashion the Government intend to take positive action to lift the industry out of its gloom?

Mr. Sproat: I am aware that those who run the docks at Hull and elsewhere in the United Kingdom are acutely conscious of the difficult times through which the British Merchant Navy is going. I am sure that the hon. Gentleman will be glad to know that last week I saw the National Union of Seamen and the General Council of British Shipping. This week, I am seeing the Merchant Navy and Airline Officers Association and the radio officers. I shall be giving the closest consideration to the ideas that they put to me.

Oral Answers to Questions — OVERSEAS DEVELOPMENT

Club Méditerranée

Mr. Spearing: asked the Secretary of State for Foreign and Commonwealth Affairs if he has received any recent communications from the Club Méditerranée concerning its plans for building in the Turks and Caicos Islands.

Mr. Brocklebank-Fowler: asked the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with Club Méditerannée concerning the establishment of a holiday village on the Providenciales in the Turks and Caicos Islands; and when he expects it to fulfil its agreement.

The Minister for Overseas Development (Mr. Timothy Raison): On 21 January I had discussions in London with Monsieur Trigano, the president of Club Méditerranée. He informed me that he is in active discussion with a number of contractors and assured me that a binding contract would be signed by 31 March. I made it clear that, unless a contract satisfactory to the Turks and Caicos Islands Government is signed by then, the Turks and Caicos Islands Government will initiate legal proceedings.

Mr. Spearing: I thank the Minister for that reply, his first since taking up his new office. May I draw his attention to the reply given by his Department to the Foreign Affairs Committee in Cmnd 8386, in which the Government refute the recommendation that the Minister should be told when a consultant's figures are changed? Is the right hon. Gentleman aware that the figures were "cooked" and changed in respect of this hotel development? Does he not think that the whole of the reply deserves his attention and perhaps reappraisal by the Government?

Mr. Raison: I have no reason to believe that the reply was wrong. However, in view of the hon. Gentleman's kindly welcome to me, I shall look into the matter.

Mr. Bowen Wells: I congratulate my right hon. Friend on taking up his office and on his reply today. Does he not agree that the establishment of a tourist industry on the Turks and Caicos Islands is the only way in which the islands can look forward to an economically viable future?

Mr. Raison: I am grateful to my hon. Friend. I believe that this project is potentially of great value to the islands.

Mr. Brocklebank-Fowler: May I add my congratula-tions to the right hon. Gentleman and ask him when he expects construction of the airport to be completed? How many other jobs and new industries, apart from Club Méditerranée, does he expect will be started in the Turks and Caicos Islands in the coming year?

Mr. Raison: Again, I am grateful to the hon. Gentleman. I believe that the airport project should be completed soon. I cannot give the hon. Gentleman a specific list of the number of other works now going on. There are, however, other significant developments on the islands.

Mr. Banks: I welcome my right hon. Friend to his new position on the Front Bench and his statement today. Does he not agree that the construction of the airport, which was agreed in conjunction with Club Méditerranée originally, will be of tangible benefit to the islands and will open up opportunities for other developments in addition to that which he has announced today?

Mr. Raison: I agree with my hon. Friend—who, again, I thank—that there are other opportunities. Nevertheless, I stress that it is essential to get on with the Club Méditerranée project.

Mr. Foulkes: I congratulate the Minister on meeting Monsieur Trigano so quickly after taking over. How can he guarantee that Monsieur Trigano will meet his promises? In the past, Monsieur Trigano has been rather long on promises and short on performance. What guarantees have been given that he will perform as he says and get this project off the ground by 31 March?

Mr. Raison: If Monsieur Trigano does not get on with his guarantees I have made it clear that the Turks and Caicos Islands Government will initiate legal proceedings.

Angola

Mr. Ginsburg: asked the Secretary of State for Foreign and Commonwealth Affairs what is the policy of Her Majesty's Government concerning economic aid to Angola.

Mr. Raison: Her Majesty's Government's policy in Angola is to concentrate on English language teaching. A small team of English language teachers was appointed in 1981 to assist the National Language Institute in Luanda. In addition, small items of equipment are provided to Angola under the heads of mission gifts scheme.

Mr. Ginsburg: I join hon. Members in congratulating the right hon. Gentleman and also welcome his reply. Does he agree that there is scope for further aid to Angola, especially if the problem of the seven British detainees can be resolved? Will he accept that the cost to the Angolan Government of keeping seven British detainees in prison for 18 years must be considerable and that it would be within the resources of this country to make such a sum available if the problem could be satisfactorily resolved?

Mr. Raison: I understand the hon. Gentleman's concern for his constituent. I do not think that it would help the prisoners if we were to link our aid programme direct to the question of their future treatment.

Mr. Sever: In welcoming the Minister to his new responsibility on the Front Bench, may I apologise for the absence of my hon. Friend the Member for Greenwich (Mr. Barnett) who is indisposed? Will the Minister confirm that, prior to his departure for discussions taking place later this week with colleagues in Africa on the future of that continent's development, he will announce to the House that it is no longer his intention, as reported, to stay in South Africa en route to the talks?

Mr. Raison: I am greatly looking forward to my visit to southern Africa this week. The fact is that I felt it my duty to be here to answer questions. The only way in which I could answer questions today was to catch the particular aircraft on which I am flying.

Mr. Proctor: May I add my congratulations to my right hon. Friend on his new appointment? Further to the supplementary question raised by the hon. Member for Dewsbury (Mr. Ginsburg), is my right hon. Friend aware that a constituent of mine is also incarcerated in Angola? Will he draw the attention of other Foreign Office Ministers to the urgent need for a meeting between our ambassador in Angola and President Dos Santos at the earliest opportunity?

Mr. Raison: I understand my hon. Friend's concern for his constituent. We are currently seeking clemency for the prisoners at the highest level in the Angolan Government.

India

Mr. Greville Janner: asked the Secretary of State for Foreign and Commonwealth Affairs what funds were made available for the Republic of India in the years 1981 and 1982, respectively; and how much he intends to make available in 1983.

Mr. Raison: British aid is planned by financial rather than calendar year. For the financial year 1980ߝ81, gross aid to India totalled £141 million and for 1981ߝ82, £102 million. For the current financial year, I expect gross aid to be about £111 million.

Mr. Janner: I join in welcoming the Minister to his comparatively peaceful new life. Has he had time to acquaint himself with the awful tragedy of the November cyclone in the state of Gujarat, which killed hundreds of

people, destroyed thousands of cattle and ravaged the countryside? What specific help is he proposing to give to former Chief Minister Babubhai Patel and his team in coping with the disaster? What assurance can he give to citizens of Gujarati origin in Leicester and elsewhere that he is aware of the problem and will help where possible?

Mr. Raison: I am aware of the sad consequences of the recent cyclone in Gujarat. The Government of India did not ask for international assistance. However, the ODA's disaster unit arranged through Oxfam for the local purchase of up of £23,000 worth of roofing materials.

Mr. Sever: Will the Minister confirm that there are immediate proposals in hand at any time, when such a disaster occurs, for relief to be offered to requesting countries? Will he investigate the possibility of making advances to countries that have suffered from disasters, without their necessarily having to ask for aid?

Mr. Raison: There is a system, I understand, by which immediate disaster relief is made available. I take the hon. Gentleman's second point. Nevertheless, we must be sure that Governments concerned want aid before pushing it on them.

Mr. Deakins: Is the Minister happy that our aid to India, with a population of 700 million, should be so disproportionate when compared with the aid that we propose to give to the 1,800 people on the Falkland Islands?

Mr. Raison: I believe that both programmes are entirely necessary. What we are doing in the Falkland Islands is right, but it is proper that much the largest proportion of our aid programme should go to India.

Employment (United Kingdom)

Mr. Welsh: asked the Secretary of State for Foreign and Commonwealth Affairs what consideration his Department gives to the effect on employment in the United Kingdom when deciding on overseas aid expenditure.

Mr. Raison: The basic aim of our aid programme is to assist developing countries in their efforts to raise living standards. In carrying out the programme we seek to ensure that aid is used where possible in ways that are also of benefit to Britain, including employment.

Mr. Welsh: Is the Minister aware that there seem to be no figures for employment created in this country as a result of overseas aid? Would he agree that that is wrong? The country should know that investment overseas creates employment in this country. Will he produce the figures to show the nation the good that we obtain from helping our brothers and sisters through overseas aid?

Mr. Raison: There is no doubt that the amount we spend on overseas aid produces considerable employment in this country. I am advised that it is technically difficult to quantify the figure precisely.

Later—

Mr. Kenneth Carlisle: On a point of order, Mr. Speaker. During Trade Questions, eight Opposition hon. Members were not present to ask their questions. Is that not disrespectful, both to the Chair and the House, and a waste of taxpayers' money?

Metropolitan Police (Reorganisation)

Mr. Frank Dobson: On a point of order, Mr. Speaker. Has the Home Secretary told you that he wishes to make a statement about the reorganisation of the Metropolitan Police?

Mr. Speaker: I can give a reply at once. The Home Secretary has not said that.

Water Industry (Dispute)

The Secretary of State for the Environment (Mr. Tom King): With permission, Mr. Speaker, I shall make a statement about the industrial action in the water industry.
The House will be aware that from last Monday night the unions representing manual workers in the water industry imposed an immediate ban on overtime and call out for emergencies. They also announced that with effect from midnight last night there would be a national strike.
The latest reports show that there have been some adverse consequences arising from last week's industrial action, which have affected normal water supplies in a number of local areas. Where it has not been possible to repair burst pipes, a supply has been maintained by stand-pipes or tankering as appropriate.
In the south-west, Manchester and parts of Wales, the water authority has advised the public, as a precaution, to boil any water to be used for drinking or cooking. Reports at midday today show that about 2,000 properties are without their normal supply. Water authorities have dealt this morning with bursts in major water mains in Eltham in south London and in the centre of Coventry. No major pollution has been reported.
My Department is in close touch with the reports from the water authorities, which are seeking to maintain adequate services to their customers. As I informed the House last Tuesday, contingency steps have been taken by the Government in the event of water undertakers asking for assistance to maintain essential services.
The House will be aware that intensive discussions have been taking place under the auspices of ACAS in an attempt to resolve this serious dispute. On Friday agreement was reached on a procedure involving negotiations under an independent chairman appointed by ACAS. It was agreed also that his powers should further extend to those of a mediator so that he could recommend terms for a satisfactory settlement. The talks began on Saturday morning. At that stage the employers increased their offer. It was rejected. After further discussions the independent chairman, acting then in his role as mediator, made recommendations for a settlement. The main recommendation was for an increase of 7·3 per cent. over 16 months plus a further 0·5 per cent. from an increase in the five-year service supplement. The employers have said that these recommendations are broadly acceptable.
I understand that the trade union side of the National Joint Industrial Council is meeting this afternoon to consider these recommendations, and that the full NJIC will meet this evening. I hope that it will be possible for agreement to be reached at this evening's meeting and thus to end, at the earliest moment, the industrial action in the water industry, which could otherwise have increasingly serious consequences all over the country.

Mr. Gerald Kaufman: Is the right hon. Gentleman aware that the circumstances are potentially exceptionally grave? Millions of households are already being seriously inconvenienced and many more could face far worse hazards unless the dispute is settled quickly.
Is the right hon. Gentleman further aware that all of these lamentable developments are the result, specifically


and solely, of his reckless meddling? On 11 November, when the employers' group in the water industry was willing to offer up to six per cent., he put intolerable pressure on it to offer no more than four per cent. That irresponsible interference was the direct cause of the breakdown in negotiations on that day. The employers did not return to the negotiating table until last week. Meanwhile, the right hon. Gentleman has been in constant contact with the employers' side and has been pressing it not to go beyond five per cent. After nearly three months of such pressure, the right hon. Gentleman suddenly says today that the present offer is reasonable. If it is a reasonable offer today, why did he veto the November offer? More than two months have been lost and a strike has come about precisely as a result of his intervention.
Will the Secretary of State give a categoric assurance that the employers' group now has the power to settle as a free agent, without any further back-door pressure from him, so that, in the words of paragraph 8 of the mediator's recommendations, the employers can make
an understanding, positive and determined response."?
Does the Secretary of State agree that it is vital that the dispute is settled quickly on reasonable and honourable terms? Will he not take any provocative action that could prejudice any settlement? The health and well-being of the people must be paramount.

Mr. King: I accept the right hon. Gentleman's opening remarks about the gravity of the situation were there to be prolonged action in the water industry, but in his remarks about the earliest stages of the negotiation he overlooked one of the complicating factors in the dispute. In shorthand it might be referred to as "the upper quartile". Two claims were presented by the unions. One was in relation to what might be called "the going rate" for pay this year, and the other was for a fundamental adjustment in basic rates of pay.
The right hon. Gentleman totally misrepresents the history of the matter. He said that the employers' opening offer was 4 per cent. and no more. That is not correct. They offered 4 per cent. and, as was provided for under the national agreement, said that if that were not acceptable bacause of the complicated background to the claim, arbitration was available. That is the background, and the employers acted in accordance with that.
The House will notice from my statement, which I hardly think could be described as provocative, that I hope that it will be possible for agreement to be reached at this evening's meeting. This afternoon I do not wish to enter the post-mortems into which the right hon. Gentleman might like to lead me. It is important for the country for the dispute to be resolved on a sensible basis. Under the terms of an agreement jointly signed by both parties, the mediator has put forward his recommendation. I hope that it will be considered seriously.

Mrs. Shirley Williams: Will the Minister accept that we share his view that the strike will have grave repercussions to many if it continues and that it is intolerable that in a civilised country people should have to boil water in order to be safe?
As this is a traditionally moderate union which has not struck in recent history, might it have reached the conclusion that the Government's policy is to yield to those with muscle, such as the miners, and to stand firm against those without, such as the National Health Service workers? Will the right hon. Gentleman consider the

possibility of recommending that an additional small sum should be paid, in an attempt to achieve a no-strike agreement in this crucial public service industry, along the lines that follow from accepting arbitration as a rule in such industries?

Mr. King: I would make the small point to the right hon. Lady that three unions are involved in the matter, not one, although I accept that there is one major union.
The right hon. Lady will be aware that the complicating factor—if I may put it that way—in these negotiations has been around for some considerable time, and it is the growing sense of grievance over the upper quartile issue which the unions particularly requested should be included in the independent chairman's terms of reference. That is the background to the dispute, whether or not it is an historically moderate union. It is obviously important that the independent chairman, acting in his role as mediator, should be able to make some pronouncement on this difficult issue.
At the moment I do not wish to enter into the pros and cons of no-strike agreements. Whatever system is adopted, it is fundamental that basic agreements should be offered if there is any question of paying a premium for them.

Sir Charles Fletcher-Cooke: Will my right hon. Friend give the public some guidance on the use of water? Is it not a fact that there is no shortage of water over vast areas of Britain? Is my right hon. Friend aware that many well-intentioned people in such areas are advising, and to some extent directing, people not to wash their cars or use water in the normal way? Is not that advice ill-conceived?

Mr. King: There is good sense in showing economy in the use of water at present. It depends on the part of the country that is involved. Where there is filtration, such economies lessen the load on the filter plants.
I am grateful to my hon. and learned Friend for drawing attention to the fact that from reports of bursts or other problems it is easy to imagine that an alarming situation is developing, well beyond the extent of the real problem. I reported to the House that about 2,000 houses are without normal supplies today. I have sought to ascertain how many houses are normally without supplies, but that figure is not available to me at the moment. I believe that in the course of an average day there is one major and about 70 small bursts. It is extremely important to put the matter into perspective. For the vast bulk of people services will continue without any interruption whatever.

Mr. Robert C. Brown: I agree that it is extremely regrettable that people have to boil water in a civilised country, but is the Minister aware that that would not be necessary if the Government had acted in a civilised manner?
Is the right hon. Gentleman further aware that his right hon. Friend the Member for Chingford (Mr. Tebbit) is very keen on lecturing the trade unions about ballot votes and that my union balloted 4:1 in favour of strike action because of his intervention with the employers? Will the right hon. Gentleman now take the advice that I offered him last Tuesday evening in the House and stop lying on the employers and give them an opportunity to enter into honest negotiations with the employees to settle the dispute today?

Mr. King: I wonder where the hon. Gentleman had been during the last week, because intensive discussions


have been taking place. The hon. Gentleman talks about procedures in a civilised country. I should have thought that in the circumstances arbitration was a civilised way in which to resolve matters of this kind. I hope that the agreement which was signed on Friday by both parties and witnessed by Mr. Pat Lowry, the chairman of ACAS, on the procedure to be followed, and which was entered upon on Saturday, will now be followed through. That is a civilised and appropritate way to resolve a difficult dispute and I hope that it will lead to a satisfactory conclusion.

Mr. David Penhaligon: Will the Minister quantify the risk of drinking unboiled water? Is it a practical proposition for children to drink only boiled water in some primary and secondary schools in the remoter parts of Britain? In many such schools one fears that facilities do not exist to produce cooled boiled water for the children to drink.

Mr. King: The warnings that have been given so far—as, for instance, in Manchester, where advice was given as a precaution—were given not so much because it was thought that there was any concern about the quality of the water, but because of worry about the maintenance of some of the precautionary arrangements to check on the chlorination of the water. In other words, the warnings were the result of worry about the reliability of the control systems rather than about the quality of the water.
I hope that the water authorities will always err on the side of caution. I cannot quantify the exact health risks in any particular area, because they depend upon the nature of any incident. However, I give the undertaking to the hon. Gentleman and to the House that I will do all that I can to ensure that if the dispute persists—I hope that it will not—the water authorities will err on the side of caution in giving advice to their customers.

Sir Albert Costain: Will my right hon. Friend give some guidance to local authorities about water supplies for swimming pools and fountains?

Mr. King: I shall certainly bear my hon. Friend's point in mind. That is one of the matters that would arise under our contingency provisions were they to be necessary.

Dr. John Cunningham: Is it not a singularly inept achievement of the Government that, as with the steel workers, they have brought an historically moderate and reasonable group of workers to a national strike? While I accept what the Minister says about the current talks, which we all hope will succeed, will he say now, unequivocally, that he has withdrawn all pressure on the employers to enable them to reach agreement in the talks without any strings?

Mr. King: Without wishing to enter into the particular attitudes and posture of an individual union, I should tell the hon. Gentleman that the claim that was under consideration was for an increase of earnings of about 20 per cent. It will obviously be for hon. Members to determine whether that is an appropriate response in the present case, but that is why there have been difficult discussions.
The matter is now under the auspices of ACAS and a mediator has made a recommendation. The employers have said that that is broadly acceptable to them and there

is no question of Government involvement. The matter must now be resolved between the employers and the unions.

Mr. Tim Renton: Is my right hon. Friend aware that the rule book of the General and Municipal Workers Union—the union most involved—says that no cessation of work shall take place unless two-thirds of the members belonging to the branch or body immediately concerned vote in favour? Is he further aware that only 60 per cent. of the national membership voted in favour of the strike and that in my region—the southern region—only 57 per cent. of those who voted were in favour? Does that not show a clear need for independent supervision of national strike ballots in public sector monopolies? If the NJIC does not vote to end the strike tonight, is there not a crying need for a new national strike ballot, to be independently supervised, on the basis of the revised wage offer?

Mr. King: I am aware that anxiety has been expressed about the ballot and the proportion of those who voted in favour of strike action. I hope that my hon. Friend will forgive me if I do not go into that more deeply. My first interest is to see whether there will be a satisfactory outcome to this evening's meeting.

Mr. Ioan Evans: Does the Minister agree that, on the first day of the dispute, 3 million people were affected by it? Will he undertake to give the House daily reports of the number of people who are without a water supply or who have to boil water? Will he reconsider the provisions of the Water Bill, which abolishes the National Water Council, and which may have created a climate in the industry that has contributed to the dispute?

Mr. King: The hon. Gentleman has made a brave attempt, as a Whip to the Committee on that Bill, to remind everyone of its existence. Nevertheless, he cannot drag it into this dispute. I shall try to keep the House informed of any important developments in the dispute. As my right hon. Friend the Leader of the House is present, I do not want to anticipate the frequency of those reports, but I hope that I shall discharge my duties directly to the House.

Several Hon. Members: rose—

Mr. Speaker: Order. I am mindful of the fact that the first main business for today is an abbreviated debate which the Liberal party has initiated. I propose to call three more hon. Members from each side and then to move on.

Mr. Michael Morris: As the unions have chosen to go on strike, and as water authorities have a statutory responsibility to provide householders with piped water, does my right hon. Friend agree that there is a strong case for ensuring that people who are without a water supply should be helped and that registered private sector plumbers should be brought in to repair leaks and reconnect the water supply?

Mr. King: That depends on the stage of the system at which leaks occur. It is for water authorities to consider those matters. They are anxious to maintain their services to their customers. It is proper that they should try to do so in the most effective way.

Mr. Reg Race: Does the Secretary of State realise that workers who usually receive less pay than the national average must sometimes wade through raw


sewage to do their job for the community? Does he agree that it is time that the Government recognised the longstanding and important claim from that group of workers for comparability with gas and electricity workers? Does he further agree that the claim has not been dealt with properly by the national negotiating machinery? On whose authority did the Secretary of State intervene in the negotiations and insist that the employers reduce their offer to 4 per cent.?

Mr. King: The hon. Gentleman has raised another point about which there is much misunderstanding. He referred to wading through sewage. The House will be aware that local authorities are responsible for most sewerage work and that it is not the main responsibility of those who are involved in this claim.
With regard to the claim for comparability with other groups of workers, which the hon. Gentleman feels has not been dealt with satisfactorily under the negotiating arrangements hitherto and in the NJIC, I understand that the claim for comparability was incorporated in the independent chairman's terms of reference at the specific request of the unions. Under the agreement the independent chairman became the mediator, and the hon. Gentleman will be aware that he commented on that claim.

Mr. David Madel: As further negotiations are scheduled, does my right hon. Friend agree that hopes of progress depend upon the imaginative interpretation of the bonus and efficiency payment schemes that were suggested by the mediator? Does he also agree that it is up to local management and local unions to develop procedures to deal quickly with local emergencies? Does he further agree that if the strike drags on the Government are entitled to ask the TUC to intervene to end it?

Mr. King: I hope that, as the procedure was agreed and the statement on it was signed by both parties under the covering signature of Mr. Lowry, there is no question of asking for further external intervention.
With regard to my hon. Friend's second point about a positive response, which was obliquely referred to by the right hon. Member for Manchester, Ardwick (Mr. Kaufman), the employers have made it clear that there is scope for increased earnings in the water authorities and water companies. I do not wish to say any more about that now. Employers have made clear their willingness to respond constructively in that respect. I hope that some progress can be made.

Mr. Bob Cryer: Is the Secretary of State aware that the Government appear to have a highly selective view of arbitration? Does he remember that for month after month the National Health Service workers wanted just that and yet the Government held out against them? Is not the lesson to be learnt that workers have been forced to go on strike due to selective intervention on the employers' side by the Government? Will he assure the House that he will keep his nose out of these affairs and allow the dispute to be settled between employers and employees as soon as possible?

Mr. King: By a slip of the tongue, I may have said "offered" when I meant "honoured" in an earlier reply. Arbitration is specifically included in the national agreement for the industry. Unilateral access to arbitration was specifically included. The honouring of agreements is important, whatever terms and arrangements may be included in them.

Mr. Anthony Beaumont-Dark: Does my right hon. Friend agree that, bearing in mind the legend that water workers are moderate, caring and compassionate, the settlement that has been offered is generous when one compares it with the wage settlements that many people in my area are forced to accept? Does he further agree that there comes a time when those who have a monopoly power should not be allowed to abuse it, especially when they have been offered an arbitration award which most people who work in industry in the west midlands would regard as the dreams of avarice?

Mr. King: I have given the relevant figures. I am anxious not to enter into a discussion of the merits of the claim, as I do not want to prejudice the outcome of this evening's discussions. Against the background of industrial circumstances in the west midlands, of which I am fully aware, I hope that people in the water industry feel that this is not an unreasonable settlement.

Mr. Norman Atkinson: Will the Secretary of State reconsider the figures that he has given the House? Is he aware that he has grossly misled hon. Members on two counts? First, does he agree that local authority sewerage workers will be influenced by the settlement that is reached with water workers? Secondly, is he aware that he was wrong to say that the money on the table, arising from the claim, amounts in aggregate to 20 per cent.? Will he explain why the present 5¼ per cent. year-on-year offer is much lower than the original one? Is that the result of his intervention?

Mr. King: With respect to the hon. Gentleman, there is some confusion in the questions that he has just asked. The 20 per cent. is the basis of an assessment which could be made of a claim which involves some comparability and some adjustment for the going rate for the year. That is different from the offer that is on the table. With regard to local authorities, the bulk of sewerage work is the responsibility of local government. The offer, which the independent chairman, acting as mediator, said should be on a 16-month basis, is not at all unreasonable.

BILL PRESENTED

DISPOSAL OF DEAD BODIES

Mr. Harry Greenway presented a Bill to give next-of-kin the right of disposal of the body when the deceased person has left no instructions to the executor: And the same was read the First time; and ordered to be read a Second time upon Friday 11 February and to be printed. [Bill 59.].

Statutory Instruments, &c.

Mr. Speaker: By leave of the House, I shall put together the Questions on the four motions relating to statutory instruments.

Ordered
That the Rating of Industry (Scotland) Order 1982 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft African Development Bank (Immunities and Privileges) Order 1983 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft Commonwealth Telecommunications Organisation (Immunities and Privileges) Order 1983 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft Commonwealth Foundation (Immunities and Privileges) Order 1983 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Garel-Jones.]

Opposition Day

[5TH ALLOTTED DAY]

Motion made and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.]

Regional Impact of Unemployment

Mr. Cyril Smith: I have taken part in many debates on unemployment. I have often said that it is doubtful whether any such debate takes one person off the dole queue. I accept that that is likely to be the outcome of today's debate as well, but it is right that debate should take place and continue.
One of the functions of parliamentary opposition is to press constantly for Government action and to spotlight the Government's weaknesses. If this Government have a weakness, it is in their unemployment record.
I do not intend to rehearse all the humane arguments against unemployment. Suffice it to say that unemployment is soul destroying; it eats at the fabric of our future as a nation because it teaches a whole generation how to live without working; it allows skills and knowledge to be wasted when they should be used; and it takes away self-respect and human dignity. It is, indeed, evil.
My right hon. and hon. Friends refute and deny the assertion that we cannot control inflation without high unemployment. We believe that that is a myth and a lie. It is not a question of one or the other. It is possible to control inflation and reduce unemployment at the same time, provided that there is a properly devised incomes strategy.
It is grossly untrue to say that much unemployment was due to mass overmanning before the "blessed Lady" showed industry where it was going wrong. I resent deeply that jibe at management, but that is the constant jibe from No. 10 Downing Street. If industry was so grossly overmanned before 1979, that is a reflection not on the Labour Government but on the management of British industry. I do not believe that management was so grossly inefficient before 1979 that it employed about 2 million bodies more than was necessary to be efficient. If there was, or is, overmanning, the majority of it is in the administration of the public sector. It is interesting to record that most labour shedding is in the private sector rather than in the public sector where there might have been some overmanning.
My third argument is relevant to the debate on unemployment, but it is not confined to any region; it applies to them all. It is an important matter which the Government should examine. I refer to the scandal that the Government penalise thrift when dealing with the long-term unemployed. Over one million people have been on the dole for more than a year. Many are over 55 years of age and became unemployed through no fault of their own. They have saved for their retirement in five, seven or 10 years' time. Today their savings—not massive fortunes but small amounts—prevent them from receiving benefit because after one year they move from unemployment benefit to supplementary benefit. They have saved that money to assist them in retirement. The present rules are disgraceful and distasteful. I hope that the Government will find a way to assist the long-term unemployed so that their savings for retirement are not taken in account.
An endowment policy is also taken into account in assessing the £2,500 earnings limit. I accept that there must be a safeguard and that if one suddenly becomes unemployed one should not be able to stick all one's savings into an endowment policy and have it discounted, but surely if an endowment policy has been held for 12 months before unemployment it should be discounted. Something should be done about the scandalous £2,500 limit.
We seek once again to spotlight not only unemployment and the evil of it, but the Government's unwillingness to take the necessary steps to tackle it. We also seek to spotlight the growing polarisation between north and south that is emerging from the unemployment pattern.
We want a united Britain, not a divided Britain. The facts and figures cause serious concern in relation to north versus south, polarisation and regional development. For example, it is interesting that the majority of the 100 parliamentary constituencies with the highest unemployment rate are represented by Labour Members. Indeed, only two of the 100 constituencies are held by Conservatives. Only eight are in the south of England. However, almost all the 100 constituencies with the lowest unemployment rate are in the south-east. Consequently, very few Tory Members have direct constituency experience of high unemployment.
It is interesting to examine the constituencies held by Ministers responsible for employment. The hon. Member for Barkston Ash (Mr. Alison), who is the Minister of State, Department of Employment, is 580th in the list. The hon. Member for Eye (Mr. Gummer) who has just joined the Department as Under-Secretary after having asked three questions about employment since 1979—two of them were written and the third was about apprentice thatchers—is 517th in the list. The hon. Member for Norfolk, South (Mr. MacGregor), who is the Under-Secretary of State for Industry, is 464th in the list of constituencies with unemployment problems. My charge is not unfair.
Rochdale has suffered badly. About 18 per cent. of its potential working population is unemployed. I see kids leaving school resigned to their fates. I see factories demolished brick by brick. They will not start up again when the economy improves. Other companies in my constituency struggle to exist. Until 1982 Rochdale had a Left-wing council which raised rates by 77 per cent. in two years. That did not help. All these matters cause me concern and I hope that the House is equally worried.
Thousands of immigrants live in Rochdale—a factor which is not common throughout the country. The evil of unemployment is serious to the ethnic minorities. Many immigrants are unskilled and have few job opportunities.
At the end of 1982 manufacturing output reached its lowest level for 16 years. Capacity in the construction industry is almost 20 per cent. below what it was in 1979 when the Government came to power. Investment by manufacturing industry has dropped by nearly 50 per cent. since 1979 and company liquidations in 1982 were about treble those in 1979. We are experiencing a sorry mess.
If one examines the problem on a region-to-region basis, from the midlands to Scotland and from the midlands to Wales, one sees how the regions vary in their suffering. In Scotland 333,000 are unemployed—15·3 per cent; in Wales, 174,000�ž16·9 per cent; in the west midlands, 355,600�ž16·1 per cent. The increase in the

west midlands and in many other regions is interesting. There is an increase of 183 per cent. in Shropshire, 198 per cent. in Herefordshire and Worcestershire, 236 per cent. in Staffordshire, and 208 per cent. in Warwickshire. Those are percentage increases in the 1982 figure compared with the 1979 figure.
In the south-west, 194,000 people are unemployed—11·8 per cent. In Yorkshire and Humberside, 292,000 people are unemployed—14·5 per cent. The increase in Humberside is 136 per cent., in north Yorkshire, 136 per cent., in south Yorkshire, 178 per cent., and in west Yorkshire, 185 per cent.
In the north-west, 430,000 people are registered as unemployed. That is 15·8 per cent. of the working population. There has been an increase of 199 per cent. in Greater Manchester alone between 1979 and 1982. The increase in Lancashire has been 166 per cent. In Merseyside the increase is 82 per cent., despite the fact that the level in 1979 was already a disaster. In Cheshire the percentage is 184. The figure in the north-east is 226,000, or 17·5 per cent.—an increase of 120 per cent. in three years. It is interesting to note that, even though Scotland is in the extremely serious position of having 15 per cent. unemployed, the figure for the north-east, 17·5 per cent., is even worse.
In East Anglia and Essex, the figure is 78,700, or 11·3 per cent. In the east midlands it is 170,000, or 11·9 per cent. In that area the increase has been very steep since 1979. In Derbyshire, the increase is 203 per cent., in Leicestershire, 188 per cent., and in Northamptonshire, 259 per cent. In Devon and Cornwall, 71,581 people are unemployed. In the south-west as a whole, the figure is 194,000. In the south of England, excluding Greater London, the figure is 367,000, or 9·7 per cent.
Those figures show unemployment of between 15 and 17 per cent. in the north of England, and 11 to 12 per cent. in the south of England. They are extremely serious. I do not attempt to minimise or underestimate the seriousness of unemployment in the south, but those figures demonstrate the great danger of polarisation between north and south unless the Government are determined to act on a regional basis. Region after region, from the midlands to Scotland and from the midlands to Wales, has suffered as a consequence.
I entirely accept that a proportion of unemployment is due to world conditions. That is why we should take a lead in the world and not merely within the borders of the United Kingdom. Instead, we seem to be scraping the heels of people with less experience, drive and initiative than us.
I reject the official Opposition's solution to unemployment. I do not believe that the solution is to become an allotment holder divorced from the rest of Europe or the world. We must not be inward looking. We must not demand the right to export without conceding the inevitability of imports. That is no way forward. We need stimulus, not initiative-killing drugs. We need a clear commitment to a mixed economy. We need an end to political tampering. We do not need privatisation, or denationalisation as it used to be called, on the one hand, and nationalisation, on the other. We do not want industries moving from one system to the other according to the Government in power. In terms of restructuring and reorganising industry, we should declare a truce on whether industries should be state or privately owned. We must let all state industries get on with running the job that


they have been given, and we must let private industry know that its future is secure and that it will not be under threat from any future Government.

Mr. Bob Cryer: The hon. Member seemed to be critical about planning trade. What about the multi-fibre arrangement, which is vital to the textile industry? What is vital to the textile industry in planning trade may well apply to other industries.

Mr. Smith: The great thing about the multi-fibre arrangement is that it is multilateral and allows for imports. It is not about stopping imports but about limiting them. There is a difference between the two.
We need investment to reduce unemployment. Neither I nor my party believes that it is possible in four years to reduce unemployment to—and I stress the word "to"—1 million. We believe that it is possible in the first two or two and a half years of a Government's life to reduce unemployment by 1 million. It is much more honest to tell the people that the long-term solutions are long term and will take much longer. None the less, short-term remedies can be applied if we really want to get industry moving again and to reduce the size of the dole queues.
Sewer pipes and water mains in all parts of the country are crying out for renewal. Clapped out railway stock needs replacement. There is a desperate need to conserve energy. Our ageing population is crying out for more care and protection through, for example, an increase in the home help service. At a time of such needs in our society, 3 million people are paid not to work. It is madness that we pay people not to work but are unable to devise methods by which from the same funds we can pay some of them to work.

Mr. A. J. Beith: Did not my hon. Friend hear the Secretary of State for the Environment say today that we have one major mains burst and 70 minor bursts in the water system on every working day? Is not that clear evidence from the Government's mouth for the need for investment in that area?

Mr. Smith: I am grateful to my hon. Friend for his intervention which supports my argument. It is particularly true in the north-west. It is not insignificant that the first major problems in the water dispute have arisen in Greater Manchester, because the pipes that were laid in the north-west were laid earlier than those in many other parts of the British Isles. They have had far more wear and use and are in need of earlier replacement.
The Government talk about controlling public expenditure. When will they contol public expenditure on unemployment? The figure is £15,000 million. I do not like the word "billion"; it slips out too easily, and people fail to understand its significance. "Billion" is a useful word for the Government, but £15,000 million per year is being spent by the Government to keep people on the dole. Such public expenditure is nonsense when part of it could be used to pay people to work instead of paying them not to work.
Many regions require special help. I am not suggesting that we turn them all into development areas. If we did that, the development area status would be quite useless. Many regions require injections of capital for essential regional tasks that would create work particularly in the worst-hit regions.
There is a need for new hospitals. I am told that Telford and south-east Northumberland need new hospitals. The north could certainly do with one or two new hospitals.
There is a need for new prisons. We hear about prisoners being four to a cell in cells built for one. We talk about trying to cut the crime rate, yet we breed crime by putting non-potential criminals and criminals in the same cell. Money spent on improving the prison service would be well spent and would provide many jobs.
Special tasks need to be done in other regions, such as roadworks and housing. Those are general schemes for all regions. There is the Severn barrage. A recycling plant in south Wales requires building. There is a need to extend gas supplies, particularly in Devon and Cornwall. Even in my constituency of Rochdale, part of the north-west industrial area, some housing estates are unable to obtain gas supplies because the north-west gas board will not agree to the laying of such supplies. This is happening at a time when we are not short of gas and when there are people on the dole who would be well able to help to supply gas.
I have mentioned the modernisation of railways in places such as Minehead and Chippenham, where the Westinghouse Brake Company is located. The building of new railway stock and the components that would be necessary as a consequence would provide work for many people.
It was ludicrous to hear the Government talk last year about closing railway workshops and putting the men employed there on the dole, because any hon. Member who goes to any London station in the afternoon and watches the trains pull out to the south and south-east will realise what sardines must feel like when they are packed in a tin. It is staggering that we can talk about closing railway workshops and reducing the amount of railway stock at a time when there are 3 million unemployed.
Work could also be done on the Sheffield canal basin scheme. Safety barriers are required on many of our motorways, and on other roads such as the A627 in Greater Manchester. I know full well that that road would benefit from the provision of safety barriers. People could also be employed to clean the beaches at Durham, because there is a need to develop tourism and attract tourists. The cleansing of beaches in Durham and elsewhere would do much to attract more tourists. In Devon there is a need for schemes to assist with the prevention of floods.
The list is endless, and all the costs can be ascertained. Within the economy, it would be perfectly feasible to have a small injection of capital—small compared with the £15,000 million a year to keep people on the dole—of between £1,000 million and £2,000 million a year to carry out most of the schemes to which I have referred. That would have a marked and long-standing impact on the dole queues and would help to reduce them in our worst-hit regions.
I hope that the Government will think seriously about investment. They should pay particular regard to regional investment and regional schemes. That can and should be done, because it would help greatly towards reducing the size of the dole queues.
This will need drive, vision, will and determination. I do not believe that the Government have created unemployment for the joy of it. It is nonsense to suggest that. However, I believe that they lack the will to deal with it. If they do, they should get out and be replaced by a


Government who are determined to work for Britain, who will put party doctrine in the dustbin and who will promote real partnership as the only real way forward.

The Minister of State, Department of Employment (Mr. Michael Alison): The hon. Member for Rochdale (Mr. Smith) spoke with his usual eloquence and conviction about unemployment generally and about its local and regional impact. I am glad that his common sense and grasp of reality made him avoid crude and sweeping indictments about the Government being responsible for the level of unemployment in Britain. Indeed, he had the grace to say that he did not believe that we had created unemployment deliberately in some pernicious or cynical way.
The present Government are not responsible for the growth in the level of unemployment in Britain, and the factual evidence is that overwhelmingly the British population does not believe that the Government are responsible.
The hon. Gentleman did not get far into his speech before advocating two specific governmental responses to the level of national and regional unemployment. He wanted, first, a slightly different pattern and mix of public spending and, secondly, so far as I could judge, he inevitably wanted more public spending.
At the outset of the debate, I ask both the hon. Gentleman and the House to recall, by way of background, the experiences of recent history, which teach us some sharp lessons about Government expenditure; about inflation, which public expenditure so easily begets; and about unemployment, which clearly flows from inflation. I shall take those three obvious factors in their reverse order.
The harsh reality is that unemployment in the United Kingdom has risen unevenly but persistently over the past 20 years. During the 1960s, total registered unemployment averaged about ½ million; in the 1970s, the average level of unemployment more or less doubled; and since 1980, the figure has doubled again. That increase in unemployment was accompanied by rising inflation over most of that period.
Inflation averaged under 4 per cent. in the 1960s. It is almost incredible to recall that now, although we are again getting pretty close to that figure. It averaged more than 12 per cent. in the 1970s, but we all remember the Labour peak of 27 per cent. inflation in 1977 which lurks behind that average figure.
I have seen and read many papers, articles and studies all arguing about the causes of inflation—about whether the growth in the money supply, wage costs or other factor costs are primarily responsible for persistent and long-term rises in the general price level. However, one case that I have never seen seriously argued is that in the pattern of rising unemployment and inflation since the 1960s, about which I have reminded the House, the unemployment was the cause of the inflation, and not the other way around—in other words, that we should let inflation rip as the cure-all for unemployment.
We must now accept that in the medium and long term inflation is the cancer that destroys the living cells of employment. If, as a result of allowing public expenditure to grow as a proportion of overall domestic expenditure and the quantity of money in circulation to grow more rapidly than the growth in real output, the unemployment

trends that I have described could be reversed, the trick would already have been done. But we know that both public expenditure and domestic money supply, in relative terms, sky-rocketed in the 1970s. For example, between 1969 and 1979, total domestic expenditure increased by no less than 308 per cent. at current prices but by only 23 per cent. at constant prices. Thus, nearly 8 per cent. of the increased money demand resulted in an increase in output, and more than 92 per cent. resulted in an increase in prices.

Mr. Robert C. Brown: If inflation is the cancer responsible for the enormous unemployment that we are now suffering, how can the Minister equate that with the fact that during the depression of the 1930s, when we had enormous unemployment, there was nil inflation?

Mr. Alison: That was an entirely different epoch in our history. However, it follows that a persistent and long period of stable prices has a much greater chance of bringing real jobs to the economy than a persistent and rising level of inflation, such as we have had since the second world war. We must grapple with the post-war phenomenon, because it is the environment in which we now live.
For that reason, the persistent and overriding priority in the economic policy pursued by the Government has been to reduce inflation. That is the route that we believe leads to the prize of more jobs and lower unemployment. There is no doubt that the Government's policies have succeeded in bringing about a marked reduction in the rate of inflation. At 5·4 per cent. the annual rate of inflation has fallen faster for the past six months than in any other major industrial country. Our record is now better than for almost 13 years. The Government are set to be the first in more than 20 years to achieve in office a lower average increase in prices than their predecessors. We are now doing better in the battle against rising prices than Europe, or the major industrialised countries as a whole, and we are still aiming at the 5 per cent. target for early this year. That is better news than almost anyone predicted as being possible 12 months ago. It shows what we can do, but America, Germany and Japan still have lower inflation rates than ours. From now on the struggle to keep reducing inflation will be tougher. We are now on the path to price stability and predictability, which in turn makes lower interest rates possible. That is probably industry's greatest need. Since the autumn of 1981, the reduction in interest rates has benefited industry by nearly £2 billion a year.

Mr. Cryer: The Minister is dealing with what he calls the post-war position and suggests that public expenditure would generate inflation. Why are the Government, in the post-war position in the Falklands, proposing to spend massively there in order to regenerate the islands' economy? They have done the same in the Turks and Caicos islands where they have built a huge runway to regenerate that economy. However, public expenditure in the United Kingdom is apparently not a solution to regenerate our economy.

Mr. Alison: The hon. Gentleman does himself no service in any serious argument about the problems by taking one item out of the overall public expenditure programme. Many items in the programme will be increased whereas others will be reduced. The


Government have overall public expenditure under control for the first time in many years. That is one reason why interest rates have fallen.
I make no apology for painting this rather broader economic perspective by way of background to the Government's response to the hon. Member for Rochdale. He, the Liberal party, and—more widely—the SDP have put forward several proposals for major public expenditure to create employment. The hon. Gentleman sketched in some of those proposals this afternoon. As I understood it, the Liberal programme aimed at taking 1 million people off the dole queue over three years. That was what we were told at the Bournemouth conference. The hon. Gentleman has now brought it down to a reduction of 250,000 to 300,000 over one year. The SDP has raised the stakes a little by promising a reduction of 1 million in the number of unemployed over two years.
Both parties include in their public expenditure strategies more expenditure on public sector capital projects to increase investment and especially to increase investment-led job creation prospects. They would also argue—certainly the Liberal party spokesman in the House of Lords did not dissent from it in the Select Committee report on unemployment—for more current expenditure on low-skilled jobs in the public sector, such as the National Health Service and local government. They would probably also argue for further selective employment measures, including job creation grants in the community and voluntary sectors. Again, the hon. Gentleman's speech hinted at that.
Many of the ideas canvassed by the Liberal party, both today and at the Bournemouth conference, are already reflected, at least in part, in the Government's programme of spending priorities and economic objectives. On capital investment, for example, the House will recall that investment in nationalised industries—British Rail comes within this broad programme—was cut in real terms by the Labour Government every year from 1976 onwards. The fall was stopped in this Government's first year and reversed sharply in 1981–82, when cash investment spending rose by more than 18 per cent. In the current year, 1982–83, another 18 per cent. increase has been authorised.
The construction industry is showing real signs of recovery—[Hon. MEMBERS: "Where?"]. I am in no doubt about the difficulties faced by the industry, but there are already signs that it is responding to increased demand, especially in housing. During the first 11 months of 1982, housing starts were 25 per. cent. more than in the same period in 1981. New orders received by contractors for all construction work in the first nine months of 1982 were noticeably higher than those for the same period in the previous year.
However, the Government believe that the case for adopting what the hon. Gentleman suggested this afternoon or any other proposals must be considered within the wider framework of the policies needed to defeat inflation. Higher public spending on employment measures or infrastructure will require a mix of lower spending in other areas, higher taxation or higher borrowing, with a consequent upward pressure on interest rates.

Mr. Harry Cowans: Will the Minister give way?

Mr. Alison: I am dealing with the speech of the hon. Member for Rochdale. I shall give way if I have time during this short debate.
Each of the consequences that I mentioned carries a penalty that falls ultimately upon industry and so upon jobs. The balance of advantage and disadvantage in specific proposals cannot be properly evaluated without taking a view on how they are to be financed and the further effects that arise. To implement all the proposals put forward by the hon. Gentleman this afternoon, and others put forward by the SDP, would mean a major addition to planned public expenditure. That could all too easily undermine the success over inflation, on which the prospects of a lasting improvement in competitiveness, and ultimately employment, must depend.

Mr. Gordon Wilson: Is the Minister aware that ceilings will be placed on public expenditure on regional development? There were reports in the Sunday Standard in Scotland yesterday that some of the industrial development money currently earmarked for Scotland will, as a result of the review being conducted by the Government, be transferred to other parts of Britain. Will the right hon. Gentleman repudiate that and say that the Government have no intention of doing so?

Mr. Alison: I cannot repudiate a report about which I have just learnt from the hon. Gentleman. I hope that he will allow me to take note of his point, to research the matter and to give him an answer as and when I can.

Mr. Cowans: rose—

Mr. Alison: I shall give way in a moment, but only if I get on reasonably well.
I remind the House briefly about what the Government's substantial programme of special employment measures is achieving. The programme has proved itself to be compatible with much lower interest rates than we have seen in Britain for years, and with falling inflation. We recognise that, while there is a need for special employment measures in the short term, they must be consistent with or work in favour of the increased efficiency of the labour market. Within that constraint, we are doing more than ever before to help. Our expenditure on special measures will be almost £1½ billion in the current financial year and almost £2 billion next year.
Our main priority is to tackle youth unemployment. It is only right to devote considerable resources to programmes of training and work experience for school leavers and others in younger age groups who might otherwise have to wait for some time before acquiring useful skills and the habit of work. The youth training scheme, which will be fully operational from September, will build on the experience of the present youth opportunities programme. It represents a major development in youth training in Britain and will form a bridge between school and work. In 1984–85, the first full year of operation, we shall spend over £1 billion on training young people and, as a result, Britain will gain a better trained work force, better able to meet the needs of industry. I am not quite sure whether this is the policy of the Liberal party, but I believe that the right hon. Member for Crosby (Mrs. Williams) has either said or hinted that it is the SDP's intention to double the length of the youth


training scheme programme. I ask the right hon. Lady to bear in mind that the first full year for which we are budgeting is costing £1 billion. I wonder whether she has worked out whether, in the second year, the programme could cost less than £1 billion. Certainly a substantial increase in public expenditure seems to be anticipated in that area.

Mr. Cowans: I am grateful to the Minister for giving way. I appreciate that he does not have much time to spare. The Minister lays stress on reducing inflation. Of course, that is vitally important, but it is germane to ask what is the cost. In the process of reducing inflation, is manufacturing industry to be destroyed? Are the north-east and similar regions to become industrial deserts? Is high unemployment to be endured? Prices will fall if everyone is unemployed, but if the policies that the Minister considers to be successful destroy our ability to compete in world markets, an inflation rate of nil will not do this country one iota of good.

Mr. Alison: History plainly shows that allowing inflation to rise leads to an increase in unemployment, and that there is always a lag between the achievement of price stability and the pick-up of employment. We are confident that employment will pick up on a plateau of more stable prices. All the national economies that have managed to keep inflation down to a much lower level than we have over a long period have a persistently better record of high employment. The Japanese and the Germans are the most self-evident cases. Getting inflation down, and keeping it down, offers us the best prospect of an increase in employment.
The young workers scheme, which started last January, directly tackles the problem of youth unemployment among those aged over 18 by helping employers to take on young people at realistic wage levels, which reflect their relative lack of experience and, frequently, their need for training. The scheme is already helping about 137,000 young people.
The other major group that needs help is that of the long-term unemployed. I am glad that the hon. Member for Rochdale has pointed out that it is frustrating for the public to see those on the dole getting money for doing nothing when it might, in principle, be desirable to try to find jobs for them. The House of Lords Select Committee on Unemployment canvassed the same idea. The Committee suggested that the Government should aim to get about 300,000 people into public works programmes of various sorts, direct from the unemployment register, and preferably from among the long-term unemployed. That is exactly what we aim to do through our community programme.
About a quarter of our total expenditure is being directed to special employment measures for the long-term unemployed—for those over 25 who have been unemployed for 12 months or more and those aged between 18 and 25 who have been unemployed for six months or more. The Government are only too anxious to help those who have experienced what the hon. Gentleman rightly described as the profoundly demoralising effects of being out of a job for a long time. We recognise that the skilled may lose their skills, and others even their basic working habits, after a long period of unemployment. It was in 1981 that we introduced the community enterprise programme, the forerunner of the present community

programme, which provided temporary jobs on projects of benefit to the community for those who had been out of work for the periods that I have described.
From 1 October last year, the community enterprise programme was incorporated into our new community programme, the largest-ever initiative in Britain to help the long-term unemployed. The programme is intended to provide up to 130,000 places at a gross cost of approximate £400 million in the build-up year 1983–84, and it will cost about £583 million in 1984–85. That is not a bad step in the direction of the 300,000 whom the House of Lords Select Committee on Unemployment thought that we should be trying to get off the register.

Mr. Richard Wainwright: The Minister must be aware that the words on the Order Paper for the debate are
The Regional Impact of Unemployment".
When will he be coming to the regions and to the effect of unemployment on the regions, about which my hon. Friend the Member for Rochdale (Mr. Smith) spoke so eloquently?

Mr. Alison: The whole idea of the community programme, with which I am dealing at present, is precisely to try to have the most significant impact where the greatest number of long-term unemployed are to be found. The programme is specifically geared to have the response that is most likely to be forthcoming where unemployment is highest. If there is long-term unemployment in the hon. Gentleman's constituency, the whole range of resources of the community programme—provided that he can find or encourage sponsors—will be available in his locality. The very word "community" shows that the programme is designed to spark or elicit a response exactly and precisely where the greatest number of unemployed and the greatest number of long-term unemployed are to be found.
With regard to regional employment policy—going slightly wider in the economic sense—the programmes available from the Department of Industry and so on are topics that my hon. Friend will be seeking to cover in his wind-up speech.
At the end of December 1982, a total of about 12,000 places had been formally approved under the community programme. Agreements have also been made with managing agents for 34,000 places, and a further 50,000 places are now under negotiation. Therefore, we are going a long way already towards filling out the capacity of the community programme to take off the register 130,000 of the long-term unemployed—most significantly in the areas where those long-term unemployed are more than proportionately represented.
The remaining quarter of our special employment measures expenditure goes on a series of measures that are not aimed at particularly identifiable groups but generally help the unemployed in ways consistent with the development of the labour market. For example, the job release scheme, which started in 1977, and helps to do something for older people, is designed to encourage workers who are nearing state pension age to give up work early and so release their jobs for unemployed people. The job release allowance is currently being paid to about 75,000 people and the estimated cost of the scheme this year is £244 million.
In addition, we are testing the effectiveness of the enterprise allowance scheme. We recognise that many


unemployed people would like to start up in business, but the fact that in doing so they lose their entitlement to unemployment or supplementary benefit may deter them. The scheme compensates for the loss of benefit by providing a weekly taxable allowance for the first year while the business is being established. It is currently operating as a pilot scheme in five areas.
So far the take-up has been encouraging. At the end of November, about 1,600 people were receiving the allowance under the pilot scheme. We must, however, be sure that this is the best and most cost-effective way of helping such people before deciding whether to extend the scheme to other parts of the country. We are always ready to consider new ways of helping the unemployed.
Our newest employment measure was introduced on 3 January this year. That is the job-splitting scheme, which is designed to help employers split full-time jobs and so open up part-time jobs for unemployed people. It offers a Government grant of £750 to employers who split jobs under the scheme provided that the part-time jobs created are filled by unemployed workers or those in the same establishment who are facing redundancy. Although the scheme is in its very early days, the initial response from employers has been encouraging.
This extensive package of measures reflects our real determination to help all those worst hit by the recession and, we believe, provides a constructive alternative to unemployment.
In conclusion, I return to my earlier theme. Of course we all want the level of unemployment to come down, but this will happen only when British industry becomes more competitive and world trading conditions improve. It is profitable firms which create jobs, so the more goods and services that our firms can sell at home and abroad, the more new jobs we shall see in all regions throughout the country. The Government's task is to create the right environment in which firms can prosper. We have already made a good deal of progress on this front; inflation and interest rates, for instance, have been considerably reduced. But industry has its part to play, too, by continuing to increase productivity and improve the quality and design of its goods. Meanwhile, we are helping those groups worst affected by the high level of unemployment through the considerable scale and range of special employment measures that I have enumerated this afternoon, many of which synchronise—and are not at all incompatible—with the objectives mentioned by the hon. Member for Rochdale. These will go a long way to making things better, but the public expenditure implications of doing more must be weighed carefully. We are doing as much as we can afford, consonant with keeping inflation on its downward trend. My hon. Friend the Under-Secretary of State for Industry, when he replies, will have something to say about the scope of the Industry Act and the Department of Industry in channelling specific aid to areas of particularly high unemployment.

Mr. Giles Radice: We are debating a highly important topic. The hon. Member for Rochdale (Mr. Smith) made a useful contribution in introducing the debate, although occasionally he appeared to be making a tour of the marginals which the Liberals hope to win at the next election. I noticed one or two of the prime targets.

Chippenham was mentioned, and so were one or two south-western constituencies, but, frankly, it was nothing like the blatantly electioneering speech of the Minister, in which he seemed completely to ignore the subject of the debate, which is the impact of unemployment on the regions.
Nobody would have thought that we have more than three million unemployed, by whichever count we use. Nobody would have thought that six regions have more than 15 per cent. unemployment and that only one region has unemployment under 10 per cent.—the south-east region, with 9·7 per cent.
Whichever way one considers the figures, there has undoubtedly been a catastropic increase in unemployment in all the regions since the general election. I shall use the Government's figures which are on a new claimants basis. For every 100 unemployed in the north when Labour left office, 215 are unemployed today. The equivalent figure for Scotland is 216; for Wales, 226; for the north-west, 243; for Yorkshire and Humberside, 272; for the east midlands, 281; for the south-east, 288. But of course the highest increase of all is in the west midlands, where for every 100 unemployed when Labour left office there are 319 today
If one compares the regional rates of unemployment in May 1979 and December 1982, one again finds an appalling increase. In those far-off days of May 1979, which many people in my constituency may regard as glorious days—

Mr. Gordon Wilson: Labour doubled unemployment, too.

Mr. Radice: In the north at that time 7·7 per cent. were unemployed—much too high—but today the figure is 17·5 per cent. In Wales the figure was 7 per cent. Today it is 16·9 per cent. In Scotland, 6·9 per cent. were unemployed in May 1979; today the figure is 15·3 per cent. In the north-west, 6·2 per cent. were unemployed in 1979; the figure is now 15·8 per cent. In Yorkshire and Humberside, 5·1 per cent. were unemployed in May 1979; now the figure is 14·5 per cent. The astonishing figure is, again, for the west midlands. In May 1979, 4·8 per cent. were unemployed; today, the figure is 16·1 per cent. Northern Ireland is, in a sense, an exception. The figure was 10·1 per cent. in May 1979. Today it is double that at 20·1 per cent. Excluding Northern Ireland, the north is still top of the league for rates of unemployment, as it was in 1979. The new challenger is the west midlands.
I am glad that the Minister has not rested his case on the fact that there has been some slight narrowing of differentials between the most depressed regions and the rest. That is not because of the success of the Government's regional policy. Any narrowing of differentials has been caused by the whole of the United Kingdom becoming a depressed area.
I wish to examine a little more closely two of the regions—the north, because my constituency is in that region and because, apart from Northern Ireland, it is still top of the league, and the west midlands, because its economy has deteriorated rapidly over the past three years. The northern region has had structural problems for a long time, but regional policy had a number of successes. Between 1967 and 1973, 50,000 new manufacturing jobs were created by regional policy. There was also considerable diversification in the economy, so that by


1979 we were facing a future with some hope. But now, according to The State of the Region Report, one in five males is unemployed, and if that rate continues it is calculated that all men will be unemployed by the end of the century. (Interruption.] I hope that that will not happen, but with the present Government anything can happen.
In the northern region the figure for long-term unemployment is considerably above the national average. More than one person in three has been out of work for more than a year and one in eight for more than two years.
With regard to youth unemployment, 75,000 young people are available for work. I accept that some of them are on youth opportunities schemes, but today the vast majority of young people in the northern region are leaving school with no prospect of obtaining permanent employment. A number of areas are appalling blackspots, where unemployment in September 1982 was well over 20 per cent. In fact, it is worse today.
In Wearside, Hartlepool and north-west Durham, in which Consett is counted, there have been unprecedented redundancies. In 1978 there were 14,000 redundancies, and in 1980 there were 36,000. In 1981 the figure was 40,000, while in 1982 it was 30,000, and more redundancies were announced in the new year in steel and shipbuilding. We have had redundancies in all the staple industries of the north—heavy engineering, shipbuilding, steel, chemicals and construction. That is what the Conservative Government have done to the northern region. [Interruption.] The hon. Member for Hertford and Stevenage (Mr. Wells) should realise that this is no laughing matter.
In 1979 the west midlands was one of the most prosperous and thriving areas of the United Kingdom. It is now one of the United Kingdom's most depressed areas, and it is not assisted by the Government's regional policy. The turnround has been appallingly swift. From a position of relatively few redundancies, the West Midlands county council area shows that in 1980 there were 37,000 redundancies; in 1981 31,000; in 1982 26,000; and further redundancies have been announced this year at Lucas.
The growth of long-term unemployment in the west midlands mirrors that in the northern region. Forty-four per cent. of the unemployed in the West Midlands county council area have been out of work for more than a year. The vast majority of young people in the region are not likely to find a job.
The main reason for the appalling increase in unemployment in the regions is the failure of the Government's economic policy, though one would not have thought so from what the Minister said. The combination of high interest rates, cuts in public spending and an overvalued currency has dealt nearly all of British industry a devastating blow from which it shows little signs of recovery. I should like the Under-Secretary of State for Industry to give us concrete signs of a recovery in manufacturing, engineering or construction. If he is proud of the Government's policy, let him tell us whence the recovery is coming.
Of course there is a world recession, but one of the main reasons for it is that other Governments, particularly the United States Government, have been following our Government's example. Until recently the United Kingdom has been cheering President Reagan in all his actions, instead of advising him to change his policies.
I agree with those who say that regional policies alone cannot solve our problems. The trouble is that the Government's stance on regional policy has, if anything, made matters worse. The Minister will not take my word for that, so I shall quote Gudgeon, Moore and Rhodes, considerable experts on regional policy, who have been studying the matter for at least 20 years. Their considered assessment is set out in December's "Cambridge Economic Review". They say that the Government's present policy stance
in the face of a rapidly deteriorating regional situation is.… firstly to incur less expenditure, secondly to concentrate regional aid on the northern conurbations"—
as a northern Member I do not totally oppose that, but I will deal with that issue later—
thirdly to subsidise capital expenditure rather than employment; and finally to limit policy almost entirely to manufacturing which is everywhere in decline or at the very most growing more slowly than other sectors.
That is an objective assessment of the Government's regional policy. It is a case which the Government must answer and we want to hear their answers today.
Let me deal with one of the Minister's best arguments. He says that expenditure on regional preferential assistance has increased, but if that expenditure is related to unemployment one sees that it has declined. That is the criterion for regional assistance. The aid per unemployed person in 1978ߝ79 was £441 and in 1980ߝ81 it had fallen to £231.
I do not argue that at a time of overall recession regional policy can produce the same results as it did in the 1960s and 1970s. For one thing, there is now less footloose industry, if any, and for another the problems are different and, mostly thanks to the Government, more intense.
As my right hon. Friend the Member for Stepney and Poplar (Mr. Shore), the shadow Chancellor of the Exchequer, argued so cogently last week, we need a different overall economic strategy which is geared to the creation of jobs and is based on economic expansion, increased public spending and public investment, a more competitive currency and an agreement on incomes with the trade unions.
In addition, we shall need, not a contracted or weakened regional policy, but a reformed, expanded and more dynamic policy. My hon. Friends the Members for Kingston upon Hull, East (Mr. Prescott) and for Stalybridge and Hyde (Mr. Pendry) have already done much work on that subject.

Sir William Elliott: Having followed the affairs of the northern region for many years, I am amazed at some of the hon. Gentleman's comments, particularly his suggestion that the northern region was one of the most prosperous in the country in 1979.
Will the hon. Gentleman explain what he meant when he said that a Labour Government would need an agreement with the trade unions on incomes? Is he suggesting that there would be an incomes policy?

Mr. Radice: I believe that we must have a national economic assessment. When one looks at the successful countries, such as Austria and Sweden, or at any country that is trying to expand its economy, it is clear that there must be a broad agreement with the trade union movement on the direction of economic policy. Our Government do not bother about that, which is one reason why we have 3 million unemployed.
I must correct the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott), because I did not say that the northern region was prosperous in 1979. I said that the west midlands was prosperous. I merely pointed out that, thanks to regional policy, the northern region was able to face the future with more hope at that time.
It is clear that we shall need a wider coverage of regional assistance. It will have to cover, for example, the west midlands, which, on any criteria, is a depressed area.

Mr. Gordon Wilson: If the hon. Gentleman proposes that regional policy should be extended, does not it follow that the benefits to other areas, such as Scotland and Wales, will be correspondingly reduced? There is a limit on the amount of footloose industry and if incentives are given to areas such as the west midlands, which has only recently suffered the problems of unemployment, that will be to the disadvantage of depressed areas that have suffered from high unemployment for decades.

Mr. Radice: Obviously we need more resources devoted to regional policy. The Opposition want to see a reformed regional policy which is not related so much to capital grants and actually includes a limit on such grants, which already account for more than half of all regional assistance. If the main criterion is the creation of jobs, the current priority given to capital grants must be wrong.
We need to devote more assistance to subsidising employment and we must give far more attention than any Government have given to helping service industries, because they will be the source of many new jobs. We must also broaden the development agency concept, which has been successful in Scotland and Wales and is working effectively in the west midlands and in London.
In its last manifesto the Labour party committed itself to development agencies for the English regions, and that idea was strongly supported by the northern region because we believe, rightly, that regions must have a much greater influence than at present over direction of their regional economies. One cannot just direct regional policy from the top. That was one of the troubles of the past—there was not enough input from the regions.
We also need to ensure that public spending takes more account of regional needs. Labour's plans for spending and investment need to be concentrated in the regions. I hope that that is where many of the jobs will come. In short, we shall need a much stronger rather than a weaker regional policy. What is so depressing for northern Members of Parliament, and for a Labour Member of Parliament representing a constituency with a high level of unemployment, is the lack of concern—

Mr. Cowans: I have been listening carefully to my hon. Friend's eloquent speech, but will he concede that in any regional policy the national Government must not concentrate on only one region? This Government, while shedding crocodile tears about losses of jobs in the regions, have either closed all regional offices or depleted them to such an extent that there has been a considerable loss of jobs—this is relevant to the northern region—in the income tax and travel offices. One could list a number of those offices, and I am sure that this applies in other regions where the Government have brought about a loss of jobs, while shedding crocodile tears about wanting to create more.

Mr. Radice: My hon. Friend is right. Any Government who are serious about regional policy have to be serious about their own occupations and spending. They have to see that they take account of regional needs and that nationalised industries take account of regional needs. One thing about the northern region, for example, is that many of the centres of decision making are outside the region. That is also true, although perhaps to a lesser extent, of Scotland and Wales. If there had been more centres of decision making—this applies to the nationalised industries as well—in the northern region, we might have done better out of the recession.
What has been so depressing about listening to unemployment debates over the past three years in the House is the lack of concern shown by the Conservative party about these issues. The Government appear to believe, and we have heard it again today, that a reduction in inflation will automatically bring unemployment down. I am glad that my hon. Friend the Member for Newcastle upon Tyne, West (Mr. Brown) reminded us that in the 1930s, when we last had mass unemployment, prices were falling. It is not surprising that prices fall when there are 3·5 million unemployed, when output is down by 15 or 16 per cent. and when one is in a deep world recession that affects commodity prices. The real trick is to combine expansion and full employment with stable prices, and the Government have not even bothered to attempt that.
Be that as it may, it is clear that the Government's political strategy is that they hope that when the election comes people will forget about unemployment. We heard a hint of that today. It may be that there are not many Tory Members of Parliament with direct experience of unemployment in their constituencies. Incidentally, there are not many Liberal Members who have direct experience of unemployment in their constituencies. I have just been looking at the league table.

Mr. Gordon Wilson: The hon. Gentleman cannot say that about SNP Members of Parliament.

Mr. Radice: Even if the Government think that they can ignore the problems of the northern region, as they have done, and those of Scotland and Wales, there are many marginal seats in the north-west and the midlands, particularly the west midlands, which the Government need to win if they are to be returned at the next election.

Mr. Gordon Wilson: So do the Opposition.

Mr. Radice: If the Government are prepared to brush aside the economic and social arguments for a strong employment and regional policy, there is a strong political argument to which they must pay attention. If, through lack of concern, stupidity or pride, they go on ignoring unemployment, they will be defeated at the next election and will richly deserve that defeat.

Mr. D. A. Trippier: I begin by warmly congratulating the hon. Member for Rochdale (Mr. Smith) who initiated this debate in his inimitable style. He was most fluent and articulate. This is not the first time that I have complimented the hon. Member. It was my pleasure to serve with him for many years on the metropolitan borough council of Rochdale and before that on the county borough council of Rochdale. They were happy and memorable years.
Whatever may be the differences between us politically, he correctly identified the problems. The solutions may be different, but the hon. Member for Rochdale cares. He cares very much, and I suspect that he knows that I care too. I hope the hon. Member for Chester-le-Street (Mr. Radice) realises that when he talks about the Government showing a lack of concern it is so much nonsense. No political party has a monopoly of concern over the unemployed.
I have complimented the hon. Member for Rochdale on a number of occasions. I think that I can say to him, perhaps slightly tongue in cheek, that I hope that our friendship will extend so far that he will be in the fortunate position of persuading the Liberal party in Rossendale not to put up a Liberal candidate against me at the next election. He might care to consider that.
I said that the hon. Member for Rochdale identified the problems—particularly the problems between north and south—correctly, but I do not think that he identified the problems within the regions particularly well. I have never forgotten the time when the sub-region of north-east Lancashire, in which my constituency lies, made an appeal to the Secretary of State for Industry for regional assistance. It seemed to me to be complete nonsense that the case that I was trying to fight on behalf of Rossendale, as was my local authority, could be identified with other problems that were within that sub-region, say in Clitheroe. Unemployment in Clitheroe was extremely low, whereas in Rossendale it was very high. I pointed this out to my hon. and learned Friend who is now the Minister of State at the Home Office, but who was formerly a junior Minister at the Department of Employment, and he agreed with me. It seemed nonsense that we were asking the Government to give blanket assistance to the whole sub-region.
I wish to try to convince the hon. Member for Rochdale that there are problems within constituencies that are not shared by adjoining constituencies. His constituency and mine touch, yet whereas Rochdale, fortunately, has diversified much more successfully away from textiles, we have enormous problems in Rossendale where 45 per cent. of the working population is employed in textiles and footwear. That must make it a unique constituency. The vast majority of that percentage is employed in the footwear industry.
The hon. Member for Rochdale knows that I have spoken on many occasions in the House on behalf of the footwear industry, as he has spoken on behalf of the textile industry. I put it to him that it may be a better argument, and one that will carry the House with us, if, instead of asking for regional assistance, we ask for selective industrial assistance. For example, we could ask for assistance in the textile industry or the footwear industry. The hon. Member knows that that would not be a precedent. Selective assistance was given to the woollen textile industry not that long ago. Many of us on both sides of the House would be prepared to support a similar case again. I am sure that the hon. Member would.
We in Rossendale are fortunate in that the Government have recognised that we have a structural problem. It is obvious that we have a structural problem if we still have 45 per cent. of our workpeople employed in textiles and footwear, and it is a mystery that we managed to get into this position without diversifying into new, more modern and more competitive industries. Whereas areas such as

Rochdale have become well known for spring manufacturing—Burnley has diversified, Bury has diversified and Blackburn has also diversified, all towns around us—we are not in that fortunate position.
I know that the Secretary of State for Industry would not have given us development area status if we had not convinced him that we were prepared to help ourselves within the community. I shall return to that later in my speech when I discuss the formation of the Rossendale community enterprise trust.
There was a great deal of antagonism when Rochdale and Rossendale received development area status, as I am sure the hon. Member for Rochdale will acknowledge. The reason was simply that all the surrounding areas asked themselves "Why them and not us?" The answer lies basically in the structural problems. But, in addition, I am grateful to my right hon. Friend the Minister of State and to my hon. Friend the Under-Secretary of State who is responsible for small businesses, the hon. Member for Norfolk, South (Mr. MacGregor), for what they have done for my constituency with the enterprise allowance scheme. This was referred to by my right hon. Friend. It is very much a pilot scheme, though in my view my right hon. Friend understated its success. He said that the take-up had been encouraging. But in my constituency and in others in north-east Lancashire selected for the scheme the money ran out not all that long ago and we had to persuade Ministers in the Department of Employment to go knocking on the Treasury's door for the scheme to be allowed to continue.
I make a further appeal to my right hon. Friend today asking him to continue the scheme after March. It is very successful. It is very appropriate. It is cost-effective, and it does not cost a great deal. The Government pay £2,000 a year to assist in starting up a business. In my view, that is very cost-effective and extremely cheap.
I am also grateful, I think, to the Secretary of State for the Environment for giving my constituency an enterprise zone. I say "I think" because it can be a mixed blessing. Members of Parliament who get enterprise zones in parts of their constituencies invite hostility from the parts of their constituencies which do not get them. There is an argument, which I have heard advanced by hon. Members on both sides of the House, to the effect that all that an enterprise zone does is remove labour from one area to another, which is robbing Peter to pay Paul. Having studied the position more carefully, I am satisfied that an enterprise zone assists business start-ups. When a business is started, it can hardly be described as taking labour from one area to another.
With the package of the enterprise allowance scheme and enterprise zones plus the grants which are available through the area having development area status—those three ingredients—we have the recipe for success. However, to draw them together it is necessary to set up an organisation such as a community enterprise trust which can guide those whom we call entrepreneurs through the dark and dismal paths through which they must go to start up businesses. I was extremely impressed two years ago when I visited the St. Helen's trust, which has been an enormous success in the north-west of England, and saw what was being done there.
It has to be emphasied that such a trust will work only if it does not itself have any money to hand out to new businesses and it is not too closely tied to the local authority. Many trusts have been formed, especially in the


north-west of England. Membership of the governing bodies has come partially from directors of industrial companies in the area who have felt a moral obligation to help in the community to combat unemployment. Their main aim is to create jobs. Membership has also come partially from the local authority, although in my view it should never have a majority vote on such a governing body. But, most important of all, such a trust must have a director. In our case, we have a secondee from the National Westminster Bank, and he is an excellent director of the trust.
The trust has been going for about 18 months and we can safely say that we have been responsible for encouraging the start-up of 400 new businesses, some very small—one and two-man businesses—and some rather larger. The task of the director has been to become an expert on the numerous grants that are available both from national and local government. Even Members of Parliament, however much we may flatter ourselves, are not experts on the various grants. It is necessary to have someone who can get hold of the chap who walks into the office saying that he wants to start a business, who can take him to see either the green field site—preferably the developed site—and show him the units, who can help fill in the application forms which have to be submitted to the Government or to the local council and which are a headache for many people, and who can work closely with him. He also has to encourage firms of solicitors and chartered accountants, without whom, unfortunately, no business can operate successfully, to give their time free interviewing prospective start-ups, between the hours of 5 and 6 o'clock in the evening for example. We have two firms of chartered accountants and three firms of solicitors in the area which are prepared to provide this service free.
The community is working together. It is not wholly the responsibility of the local authority that unemployment is so high. It is not the responsibility of the sitting Member of Parliament for Rossendale or of the last Member, and it is not the responsibility of this Government or of the last one. We are all in this together, and we all have to work on it. It is an exercise in pulling ourselves up by our bootstraps. It is an exercise in self-help. I have received enormous encouragement, especially from my hon. Friend the Member for Norfolk, South, in all that I have attempted to do.
I cannot miss this opportunity with the Budget looming up, to make a plea for some consideration for small businesses and others of my constituents. Many Conservative Members who represent industrial or semi-industrial constituencies are very anxious that, in considering his Budget, my right hon. and learned Friend the Chancellor of the Exchequer should ignore the appeals that may be made to him by, for example, the Institute of Directors asking him to reduce the standard rate of income tax by 1p or 2p in the pound. Instead, my right hon. and learned Friend should listen more carefully to what the CBI is saying, since the confederation believes that it would be better to have the indexation of personal tax allowances.
I hope that my right hon. and learned Friend will listen to me and to other Conservative Members who represent industrial constituencies when we say that we would rather have indexed personal income tax allowances. I have said already that the vast majority of those employed in textiles

and footwear are low paid. Many of them would very much appreciate personal tax allowances being increased. It would take many of them out of the tax net. It would also restore the incentive to work, which the Conservative Party spoke about a great deal prior to the last election. I cannot fail to make the point that we gave the pledge at that election that we would reduce taxation overall.
I see that the CBI is asking for a de-rating of some 15 per cent. on business properties. I wish to try to persuade my right hon. and hon. Friends that this is perhaps not the way to proceed. It would require primary legislation. Although I have much sympathy with the idea, it is much more important to raise tax allowances, for all the reasons that I have tried to give.
I conclude by making an appeal about the temporary short-time working compensation scheme. Many hon. Members representing constituencies with traditional industries, such as textiles and footwear, are familiar with the scheme. I did not like the Labour Government's idea of introducing the temporary employment scheme. It was at the time a much abused form of subsidy. It was not used for the purposes for which it was originally intended. At the risk of being crude, it was an absolute rip-off.
The temporary short-time working compensation scheme is more accountable. The trouble is that it is not sufficiently flexible. The rules that govern it are so stringent and so tight that many of the firms operating in the two industries I have mentioned—just as much in Rochdale as in Rossendale—are teetering on the brink and are worried about whether they will go to the wall. I plead with the Minister to persuade his right hon. Friend the Secretary of State for Employment to examine this issue again, preferably before March, to see that the scheme is allowed to continue and to become more flexible. I do not have to outline the details of what I want. I have made two representations and brought lobbies from the trade unions and the employers to see Ministers. We all stand together on this matter. I plead with the Minister to be more flexible.
It will be realised from my remarks that I have much to thank the Government for—the fact that Rossendale has been made a development area, the fact that we have an enterprise zone and also the enterprise allowance scheme. Those benefits, together with the continued success of the Rossendale enterprise trust, will ensure that the Rossendale valley becomes strong and vigorous once again.

Mrs. Shirley Williams: I should like to thank my hon. Friend the Member for Rochdale (Mr. Smith) for introducing the debate and for the excellent manner in which he presented the case to the Government. Without boring the House by repeating the figures that he gave, which ranged from 17·5 per cent. unemployment in the north-east down to the much more acceptable 9·7 per cent. rate in the southern counties, it should be stated, as hon. Members know, that those figures do not represent the true situation. All the proportions and all the absolute figures should probably be increased by between 25 and 30 per cent. to take account of the substantial number of people who are not registered or the number of people who, while registered, can no longer claim benefit.
My hon. Friend the Member for Rochdale put his finger on an extremely important point. The greater the


proportion of long-term unemployed—they now exceed one-third of the total—the larger the number of people who disappear from the dole figures because they have savings exceeding £2,500 and therefore cannot claim any form of benefit. There is a profound irony about a Government who are committed to the concept of thrift and savings penalising people to this extent, not only by refusing them supplementary benefit but by taking them out of the unemployment figures altogether. This has happened only as a result of the change in the Secretary of State's manner of collecting the statistics.
It is also true to say, as the hon. Member for Chester-le-Street (Mr. Radice) remarked, that the figures represent, not a single stagnant situation, but a situation that is dynamically going down, if that is a possibility in physics. In recent weeks, I have travelled, like, I suppose, many hon. Members, from the north to the south of this country, from Scotland, through the north-west to the west midlands and London. It is striking to learn in every regional centre about yet another round of redundancies either here or on the way. The hon. Member for Chester-le-Street referred to some of them.
The hon. Gentleman referred to Manchester Steel and to Lucas Industries, where, I believe, 1,800 jobs are at risk. One can add the shipbuilding industry, where another 2,300 jobs are about to be lost in the north-east. One can refer to the 1,400 jobs lost last week in the car components and car parts industry of the west midlands. One can refer to the disappearance in the north-west, part of which I represent, of the Bowyer's meat company in Walton, Liverpool, and to the suggestion that even Halewood, that great project of an earlier regional policy, is severely at risk.
When the forecasts for the Government hint at the possibility of another 300,000 unemployed this year, one has to say that the first month of the year shows them to be well on target. I make that point because I sometimes think that the Minister—a hard-working and decent Minister—sounds increasingly like a man who is bringing struts and girders to hold up a collapsing building. All the special employment schemes, well-intentioned though they are, were designed mainly to deal with temporary cyclical unemployment. They are being used today desperately to try to hold back the tide of what can only be described as a level of unemployment that is beginning to add up to the collapse of a large part of the industrial economy.
Hon. Members will be aware that what is being seen now is very different from the brief recessions of the mid-1970s or the late-1950s. Factories are no longer being mothballed. They are no longer being closed down but maintained. More and more the story is one of machinery being sold off, much of it abroad, at second hand, and factories being made derelict and sold off for their site value. The evidence is clear in receiver's reports for one firm after another.
There is no point in going on with this despairing litany which the House knows well, except for the purpose of saying that those hon. Members, whatever their party, who represent the north-east, the north-west, Scotland and Wales sometimes have the sense that the sheer despair that is overtaking our cities and villages is not fully appreciated in Downing Street, in the Cabinet and in Whitehall.
I see no point in continuing to say what has been so eloquently expressed so many times. I should like, rather, to underline the dilemmas faced by the two historic parties

and then to mention precise areas where the Government could now make a substantial change in the level of unemployment. The first dilemma is that faced by the Government in their growing recognition that any steps towards reflation and recovery of the economy put at risk their own precious inflation record. The Government have not been able to persuade themselves, let alone anyone else, that they have permanently broken inflationary pressures other than through an intolerable level of unemployment.
I say this to the Government. Bit by bit, other countries that share their monetary views are changing their minds. Only two weeks ago President Reagan signed a massive public works scheme amounting to $13 billion in the United States. Soon, the Government will be the only Canute glumly watching the sea when everyone else has left for safer pastures. The Government's dilemma—it is a dilemma—is how they can bring about a recovery without putting their one achievement at risk.
The reason goes one stage deeper, and I do not believe that any Minister has yet seriously addressed himself to the topic. In the desperate attempt to cut public expenditure, the Government necessarily created redundancies, which in turn created Government public expenditure on unemployment benefit. This, in turn, led the Government to chase further public expenditure cuts, which in turn increased the number of unemployed, and which in turn again increased public expenditure on unemployment benefit. Simply, the Government are caught in a Catch 22 situation.
One result has been that last year, 1981ߝ82, the Government had a larger share of the gross national product going into public expenditure than the Labour Government had in 1978ߝ79. The reason was, of course, that expenditure on unemployment benefit alone went up from £5,000 million to £16,000 million in those three years. As the hon. Member for Newcastle upon Tyne, West (Mr. Brown) said, the Government are chasing their tail and they see no way out of the vicious circle they have created.
I do not deny that the Labour party is thinking hard about how to get back to a high level of employment. I pay tribute to the Labour party for pursuing that goal, which my party, too, pursues. However, the Labour party has a dilemma which comes in two parts. First, the party is being driven towards the logic of an incomes policy. The hon. Member for Chester-le-Street said as much, and what he says is true. Incidentally, he did not say a wages policy; he said an incomes policy. There is an important difference. One cannot escape from an incomes policy if one reflates without inflation.
The second part of the Labour party's dilemma is how to get reflation without an outflow of capital over a short period of weeks, which would put the party's whole policy at risk, without imposing a form of protectionism. The difficulty here is that, whether one calls protectionism the planned growth of trade or by some other attractive euphemism, we all know that the world is poised for a beggar-my-neighbour feud of retaliation.
The Labour party, like the Government, thinks that it is seriously addressing itself to our economic problems. But I want to point out to Labour Members that the last Special Commissioner for Trade for the United States Administration, Mr. Robert Hormats, who resigned six weeks ago because he did not like what the Reagan Administration were doing, is on record as having said that


if any substantial European Government were to adopt protectionist policies, the inevitability of massive retaliation—the United States has limited itself to selective controls, as we have—is quite immense. However much hon. Gentlemen may shout, there is a clear distinction between massive protection and some measures of selective protection, which I agree do not go as far.

Mr. Radice: The Labour party is not putting forward a policy of protectionism. We say that it is necessary to plan trade and that there may be a case for selective import controls. However, there is also a dilemma for the right hon. Lady's party. If her party ever came to power, how would it reflate the economy when it has no relationship of any kind with the trades union movement and, on the contrary, has done all that it can to oppose that movement at every turn?

Mrs. Williams: I should be prepared to accept the hon. Gentleman's charge more readily if it were not for the fact that his party gave mine no support when we moved amendments requesting industrial democracy and the acceptance of the fifth directive in our deliberations on the Employment Bill before the Christmas recess. What the hon. Gentleman said about protectionism may be true. All I can say is that it was not the impression given in the speech of his right hon. Friend the Leader of the Opposition at the weekend, which I read carefully and which specifically indicated a movement from the Labour party's previous support for limited systems of selective import controls.
I want to deal now with three areas which I hope the Minister will consider. They have nothing, or little, to do with the argument that rises in public expenditure would make them impossible. The first area concerns the enterprise allowance scheme, of which the hon. Member for Rossendale (Mr. Trippier) spoke. He is more fortunate than my hon. Friend the Member for Rochdale, in that the enterprise allowance scheme neatly stops at the border of his Conservative constituency and neatly excludes my hon. Friend's Liberal constituency.

Mr. Trippier: The point has been made several times that the decision to give me an enterprise allowance scheme may have been political. What nonsense. Within the area we have Accrington, which has a Labour Member of Parliament, Burnley, which is also Labour, Nelson and Colne, which is Conservative, and my constituency. I cannot let the right hon. Lady get away with that.

Mrs. Williams: I never believed that the Government had it in as much for the Labour party as for the Liberal party, so my point stands. Perhaps I might be allowed to develop the point.
The enterprise allowance scheme has been limited to a small number of pilot schemes. The scheme appears to be successful, or going very well, as the hon. Member for Rossendale said. However, last week's Financial Times implied—perhaps the Minister will comment on this when he winds up the debate—that the enterprise allowance scheme was now at considerable risk, that no further applications would be taken after March, and that the Government would review the scheme and decide whether it could continue. That is a devastating reaction to what most of us regard as one of the few promising schemes that

the Government have brought forward and, incidentally, one that is totally compatible with the Government's philosophy, because it is an attempt to persuade people to set themselves up on their own and not be a burden on the state. If this attractive mouse of a scheme is not now to be supported, what hope is there for the much larger schemes which many of us here would like the Government to adopt? The second area, also affecting small businesses and high technology, relates to the disturbing fact that the Government, in the shape of the Department of Industry, are now reconsidering the minimum loan guarantee scheme for small, high-tech businesses. That scheme is pathetic. Last year it was worth £150 million—big deal! In Germany the scheme is worth £1,400 million. The British scheme is made available at commercial rates. The German scheme was made available at a 9 per cent. fixed rate of interest.
If all that does not make hon. Members' blood run cold, perhaps I should quote a letter addressed to the editor of The Economist this week by the managing director of an electronics company, which says that Japan is now making £20 billion a year of subsidised low-interest loans available to high-tech small business, while we are making £150 million available and the loan rates are not even subsidised. When the Government call, as they frequently do, for more competitiveness, I wonder whether they begin to realise what we are up against with the amount of Government support that less dogmatic Governments give to their small businesses and to their public sector, in high technology.
The third area is infrastructure, or the basic foundation of industry. The Minister said, and he said it sincerely, that he wanted us to address our minds to public expenditure. Regional support has fallen in 1982 price terms from £1,300 million in 1975ߝ76 to £600 million in the current year, 1982ߝ83. My hon. Friend the Member for Rochdale mentioned this, as did my hon. Friend the Member for Truro (Mr. Penhaligon), who spoke about regional support. It has fallen to £600 million in real terms. The crucial aspect of this regional money is that two-thirds of it, £400 million, has gone to capital assistance. As the hon. Member for Chester-le-Street said, under the Government there has been a major shift towards capital assistance and away from subsidies or support for individual jobs.
I should like to leave the Government with the thought that in net terms it costs between £4,000 and £5,000 to create a job in energy conservation. The returns on energy conservation are about 30 per cent. a year in savings on fuel bills. In other words, the scheme more than pays for itself over a four or five-year period. The French Government have announced an energy conservation scheme that will create 330,000 permanent jobs over the next three or four years. We have virtually nothing. We are cutting what we had. For the £40,000 that we are spending on regional assistance to create one measly job, the Government could create eight jobs in energy conservation.
The Minister asked about the two-year scheme for training put forward by the Liberal party and my party. That scheme accepts the concept of splitting starter jobs for school leavers so that they spend half their time training and half in work. That scheme has already been tried by GEC in Coventry, with great success. The tragedy is that the Government's job-splitting scheme does not include any allowance towards a split school leaver job if the other


half of the time is spent on training and not another half job. I believe that that is a great mistake by the Government.
We have tried to put forward concrete suggestions for creating more jobs for the same amount of money. The Government seem unaware of the scale of despair that is now engulfing a large part of the country. The right hon. Lady the Prime Minister is presiding, not over a united kingdom, but over a divided one, and one in which the divisions will grow more profound unless more radical steps are taken to deal with the current levels of regional unemployment.

Several Hon. Members: rose—

Mr. Deputy Speaker (Mr. Paul Dean): Order. The winding-up speeches are expected to begin at about 6.25 pm. Many hon. Members still wish to speak, and short speeches will help everyone.

Mr. Mark Lennox-Boyd: The right hon. Member for Crosby (Mrs. Williams) described the unhappy regions of England. If she had gone to Lancaster, she would have learnt that in the Lancaster and Morecambe travel-to-work area unemployment is 13·9 per cent. which is higher than the English average but lower than the north-western average. It is no comfort to my constituents to know that matters are worse elsewhere.
The area from which I come has had a continuing problem for the past few months. My hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman), who is in the Chamber, will know as well as anyone else that we had disappointing news before Christmas.
I want to make three general comments about unemployment as it affects both the regions and the nation. I know that my first comment is regarded by many people as highly controversial. I shall qualify it. To my great surprise, although on analysis I can see how it is reasoned, I believe that people do not blame the Government for unemployment. I say "To my great surprise", because it is plain that previous Governments were blamed. I make the qualification that what I have just said does not deny the fact that the Government's policies are understood by people to have an immensely important effect on unemployment. The opinion polls show such a continuing degree of support for the Government that it is difficult, when the polls also show that unemployment is a major public preoccupation, not to conclude that the public find that there are other extremely important factors which are not directly the Government's responsibility.
The hon. Member for Chester-le-Street (Mr. Radice) said that it was well known that the Government have doubled the level of unemployment. The hon. Member for Dundee, East (Mr. Wilson) said "You did as well." That is perhaps the single most shining fact that leads the public to conclude that the dreadful levels of unemployment that we are suffering are not directly the Government's responsibility and that the Government's capacity to affect them can only be marginal. If we fail to recognise that fact, we shall fail constantly to face the problems realistically and sensibly.
Shortly before Christmas, my hon. Friend the Member for Rossendale (Mr. Trippier) was given an enterprise zone. I was given a domestic computer for Christmas. It is an object that in W. H. Smith costs less than half today's

national average weekly wage. It gave me, as I am sure it will give anyone who has sought to be familiar with such machines, even greater cause for worry. Just as the slide rule is an antique instrument today, I believe that in a decade or perhaps a little more the occupation of clerk will be as antique as the copywriter or scrivener.
I believe that many thinking members of the public realise that as well, and accept that it will take at least a decade, if not longer, to overcome the problems of unemployment. When we do, we shall have different employment structures. There will be much earlier retirement, job sharing and a much shorter working week. Hon. Members should foster that understanding as the right hon. Member for Down, South (Mr. Powell) did in last Wednesday's debate on the economy when he said that we were facing a revolution as significant as the industrial revolution of 150 years ago.
In my constituency the financial hardship arising from unemployment, hard though it is, is the least of the difficulties faced by an unemployed person. I believe that isolation, moral degradation and psychological depression are far harder for people to face. During the recess, many hon. Members may have seen Professor Dahrendorf's progammes on the state of our nation. He made one remark that I consider significant. He said that unemployment was not the problem of the future; the problem of the future was lack of activity. He said that the working week inevitably will be shorter and inactivity, whether enforced and involuntary or voluntary, will be the problem that we shall have to face.
This is a debate on the regional impact of unemployment. As hon. Members have said, it is important to distinguish between two factors—whether the Government should be spending more, and how should they be spending within the regions. It is upon the latter point that I wish to concentrate my concluding remarks.
The Government's policies for the regions are well founded. The only possible qualification that can be made is about the funds that are made available and that relates more to an economic debate than to one on regional unemployment. The Government are seeking to extend their policy in three ways. First, there is the development of city areas such as Liverpool, Rochdale and Wigan. There is the Merseyside task force, the enterprise agencies and the enterprise zones. It is of fundamental importance that regional policies should be more concentrated upon the city areas than upon the regions as has been the case in the past because it is within the city areas that there is the significant and high unemployment.
Secondly, Government help is being directed towards activity, as Professor Dahrendorf suggested. Increasingly, those schemes will be combined with others undertaken by local people. In recent months in my constituency, organisations, formed by people who feel that they can make a contribution to the problem of inactivity, have been cropping up. We have heard from hon. Members about similar schemes in their constituencies. In the course of the next few years it will be the duty of Governments to foster such activities.
Finally, the Government should help those areas of Britain where unemployment is high by spending money to improve the infrastructure of services in such areas—for example, roads. In doing so, we should first consider the cost, secondly whether such expenditure can improve an existing resource, and thirdly whether, having spent that money, that resource will create more jobs. One such


scheme is the M6 link road which is in my constituency. That is a project to link the M6 to the port of Heysham. I need not embarrass the Ministers because the Under-Secretary of State for Transport is not present. However, I shall continue to press the scheme with all vigour because it fulfils the criteria which I have mentioned. The port of Heysham is a resource with a potential which has not been fully exploited. If its communications with the M6 can be improved, the port of Heysham will be improved immeasurably, making it more likely that jobs and prosperity will be created.

Mrs. Renée Short: We are grateful to the hon. Member for Rochdale (Mr. Smith) for giving us the opportunity to have a brief debate on regional policy. I am sorry that the Minister did not deal with the Government's positive proposals to help the regions. That is what we want to hear today and I hope that we shall do so when the Under-Secretary of State for Industry replies.
This is a serious debate on a depressing subject. Despite what the hon. Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) said about people not blaming the Government for unemployment and the economic position, the fact remains that unemployment stands at the highest level in living memory, with the highest inflation rate, until very recently, and with widespread poverty among families, affecting young and old alike. The most depressing part concerns the stopgap measures now being used to help young people gain experience. While they are all right as far as they go, at the end the young person goes back to social security pay or whatever he is entitled to and does not get a job, which was the function of the youth opportunities programme and other such schemes.
We are in a no-growth economy and if the Government continue in office future prospects will be grim. The National Institute of Economic and Social Research forecasts only a 1 per cent. growth in 1983–84, with ever-rising unemployment. If the Minister has better news for us we shall be delighted to hear it. The Prime Minister is told continually by Labour Members and by many in industry, including the employers' associations, that she must stimulate output by cutting taxes on industry and increasing Government expenditure. However, all that we hear from the right hon. Lady is that British industry must become more competitive by shedding even more labour, thus increasing still further the unproductive work force, which must be supported on social security and unemployment benefits. If that recipe is continued, unemployment will go on rising, despite the Government's method of counting the unemployed.
That is the picture of what has happened in the west midlands. Basic industries such as steel, other metals, car, building and building components—basic industries on which our former prosperity was based—are all in a seriously depressed condition. Five years ago over 40 per cent. of the work force in the west midlands was engaged in the metal industry, yet those industries have now gone to the wall. Unemployment in the west midlands is now very high—above the national average. My constituency, which prospered for so long in the production of industrial goods of high quality that were sought all over the world and which exported well-developed high technology

products to developed and undeveloped countries alike, now has an unemployment level of 18 per cent. That is appalling. Every week we hear of more short-time working, more closures and lay-offs, particularly in the motor components industry, and there are no jobs at all for the thousands of men, women and young people who are unemployed today.
The Prime Minister says that we must become more competitive and produce goods that people want to buy while at the same time she is reducing their ability to buy. The right hon. Lady complains that industry is not standing up to competition from the EC and the Far East. Firms are being forced to cut back on the investment capital that they need to modernise. The Prime Minister is not prepared to do anything to ensure that imported goods are of the standard of quality and safety that we expect. Therefore, the market is flooded with tons of cheap, tasteless, shoddy and frequently dangerous consumer goods.
Why are we not more discriminating? I am not suggesting that there should be overall import control but why do we not employ selective ones? Why do we allow tons of rubbish to come into our shops? Why do we not use the mechanism that exists in the EC? We could use the same regulations to control the standard of goods and raw materials that come to Britain. That has been done in France, Belgium and Germany, yet every industry in Britain is threatened by the continuing stream of poorly made and substandard goods, whether they be clothing, toys, household equipment, gadgets of all types, televisions, computers and even motor cars. We therefore have a throw-away syndrome. We buy cheap, shoddy and poorly designed goods that soon break down, throw them away and buy a similar replacement. All the while, our jobs in manufacturing are disappearing.
The scheme that is employed in the EC means that British firms which export to countries such as France, Belgium and Germany must comply with stringent certification requirements. That process can take two or three years. That is a jolly good way of holding back imports from foreign firms. Moreover, firms that want to export to those countries must pay for certification. Therefore, not only is there freqently a delay of two or three years but the firm must pay about £30,000 to obtain the necessary certification if the outcome of the tests is successful. If they do not achieve certification, the firm just loses money.
Why do we not do something to protect our firms from unfair competition from abroad? Why do not the Government realise that every unemployed person in Britain represents a loss of revenue to the Treasury in income tax—which has increased from about 32 per cent. to 36 per cent.—insurance contributions and other welfare payments and, above all, in the contribution made by working people to the gross national product? The unemployed only consume. They make no contribution to the GNP, however much they may wish to do so. Moreover, it is expensive to pay people to be unemployed when they could be producing goods that we should export.
The revised plan of the West Midlands county council describes the situation in the west midlands. I should like the Minister to answer the points that it raises as they are important for our manufacturing industry. It says:
the dramatic rise in unemployment, now over 17 per cent. in the county as a whole, rising to over 30 per cent. within certain inner city areas, with youth employment an even more serious


problem. These levels are showing signs of becoming permanent and even increasing as the recession deepens, with long-term unemployment now a major problem. Rising unemployment is accompanied by serious social consequences. The West Midlands, once the workshop of the world, is facing the worst economic crisis in its history. It has suffered from being too heavily reliant on a narrow range of declining metal-based industries and having too low a proportion of fast growing service industries.
Because we have such a small proportion of manufacturing industries producing consumer goods we have to import such goods, when we should be exporting them to our competitors.

Mr. Hal Miller: I am happy to follow the hon. Member for Wolverhampton, North-East (Mrs. Short). I strongly agree with her about the importance of British standards, the remedies that they offer for unsatisfactory goods and the need to develop the necessary quality assurance as a basis for our exports. I was a little puzzled by the rest of her speech. She seemed to assume that Government spending would create jobs in the service industries. That concept is foreign to Conservative Members.
The right hon. Member for Crosby (Mrs. Williams) gave an engaging travelogue for last week while most of us were detained in the House until quite late at night. I notice that she was pictured on a beach in Devon with her hounds of war, in an un-Canute like attitude, with the tide going out rather than coming in, as support for the SDP ebbs.

Mrs. Williams: The tide was rising and it was Sunday.

Mr. Miller: The tidal predictions seem to be out of kilter with the astrological ones, never mind the political ones.
Unemployment has made the greatest impact in the west midlands, but if one listens to the speeches of Opposition Members one fails to gain any impression of what is happening in the country. The trend for unemployment over the country as a whole has diminished remarkably since the dark period of October to November 1980, when 103,000 people lost their job each month. The current rate is about one-fifth of that.
We should also bear in mind that last year about 600,000 new jobs were created every month. That represents about 20,000 new jobs each day. Moreover, four out of five school leavers were getting employment. The rise in unemployment last year was lower than in other major manufacturing countries. There were 15,000 more new firms created than went out of business. Those figures put the picture into perspective.
The problem in the west midlands is serious. Firms there must take note of what the Prime Minister has said. It is necessary to be able to compete. The purpose of my speech is to try to persuade the Government to establish the necessary conditions of competition for British firms, especially those in the west midlands. I have urged my right hon. and hon. Friends for some time to put together what I call a competition package to create an environment in which firms can compete and in which people are given confidence to compete.
In the west midlands, that package should comprise the removal of internal discrimination against our region, the first and foremost of which is regional aid. At the moment the west midlands is suffering the fastest growing rate of

unemployment in Britain, and faces the highest level of unemployment bar one other area. There is therefore no reason to continue with regional aid.
I am glad to note from what my right hon. Friend the Prime Minister has said and from what my hon. Friend the Minister of State, Department of Industry said during Question Time last week that regional policy is being reviewed to examine the extent to which it effectively creates jobs. I sympathise with the right hon. Member for Crosby, who asked the same question in a slightly different form.
That internal discrimination against the west midlands extends to the special taxes on our main products, such as the special car tax and VAT on company cars. We are also discriminated against internally by being barred, as a result of Government decision, from the receipt of EC funds for specific projects. I have argued for some years that industrial aid should be concentrated specifically by sector. I congratulate the Under-Secretary of State for Industry on the success of his small engineering firms investment scheme, which I hope will be continued after the next Budget.
External discrimination against the west midlands is another factor. We have been much encouraged by the Prime Minister's strong lead against the gross inequalities and disparities in Spanish tariffs and Japanese trading practices. Other examples of discrimination mean that we do not enjoy full, fair and reciprocal trade arrangements for our products. In the interests of brevity I shall not go through the whole list, but I must mention the collapse of the EC steel cartel as judged by the prices at which steel and steel products are landed in Britain. This involves bars, washing machines and cars.
The Opposition make much of the unfair trade in imported vehicles. Let us examine the rise in the number of imported vehicles since 1975. The increase in imports can mostly be ascribed to Ford, Vauxhall and Talbot. The percentage of registrations from other exporters to Britain without plants here rose in that time from about 32 to 35 per cent. Tied imports rose from 1·5 to 22·5 per cent. That is where the damage is being done. The Government should take up seriously with Ford and Vauxhall the establishment of additional manufacturing plants in Britain to retain the design capacity and therefore the purchasing source. That is what is so important to the components industry, and that is why we are so perplexed in the west midlands about the reported decision by BL to import 30 per cent. of its components. BL has to buy complete foreign gear boxes, if not larger items, from abroad because we do not have the opportunity to supply the components since decisions about the source of supply are taken abroad.

Mr. David Alton: What would the Conservative party do about the even worse problem of the possibility announced on Friday of Ford taking 13,000 jobs away from Halewood and moving them to Japan to manufacture cars there?

Mr. Miller: Halewood's productivity record is lamentable. Because of pressure on Ford to make more in Britain, it has had to address itself to operating more competitively.
The hon. Member for Wolverhampton, North-East referred to another area of competitive policy in the west midlands—the need for us to be involved in the new


technology industries. It is disturbing to think that, although the west midlands houses about 36 per cent. of the country's manufacturing industry, there is only 10 per cent. support for the Minister's innovation scheme, when the reverse is true for the southern region. We must, therefore, pay particular attention in the west midlands to developing skills in training and after-training, so that we can update our industry to compete in future business.
Discrimination has been exercised against the west midlands in the provision of infrastructure. Our motorway system is not complete. The largest exporting area of the country still has no direct motorway connection with the east or south coast ports. Time does not permit me to mention several other infrastructure problems. The west midlands has been discriminated against. The discrimination has spread to private authorities and it is widely believed in the west midlands that clearing banks, for example, have directed that a lower priority be given to investment in the west midlands. Pension funds are diverting investment from the west midlands because of its low growth prospects.
I call on the Government not only to recognise the region's problems, but to respond with Conservative philosophy, involving the ability and the will to compete. Following that line and what has been started by the Prime Minister and the Secretary of State for Industry will give back to the region the confidence to enable us to commit ourselves to make a success of this Government's policies and those of the next Government, which we believe will be drawn from the Conservatives.

Mr. Richard Wainwright: When the Liberals chose the subject for today's debate, we knew that no Cabinet member would dare put in an appearance. One of the faults of the Cabinet, in so far as it now plays any part in our affairs, is that it contains no voice from the stricken manufacturing areas of Britain. Knowing that the Minister of State, Department of Employment, normally tries to be helpful and considerate, we accepted that he would speak at the beginning of the debate. I am sorry to have to say that, although the Minister of State may be grossly overworked clearing up the havoc caused by the Prime Minister and the Chancellor of the Exchequer, for one reason or another his speech today was not just a discourtesy, but an insult to the House—a twofold insult. He ignored the subject of the debate.
The motion covers the regional impact of unemployment, not because we complain that one region suffers more than another in the league of misery, but because the unemployment rate over many years in some of the regions threatens our industrial base. There comes a time, when double-digit unemployment persists for many years and shows no sign of abating, when the research and development and ancillary industries of some major industries are severely threatened. We wanted a debate on that subject, as we have made plain. The Minister of State simply used the Front Bench as a pulpit or podium for a press conference to advertise some of his temporary and palliative schemes.
The second part of the insult is that the Minister propounded nothing more than superstition. It is a superstition that, by means that no one on the Government Front Bench can explain inside or outside the House, just

because the inflation rate is low there is bound to be economic recovery. There has never been an explanation of that superstition. I am astonished that any Minister could suppose that a drop in inflation, built largely on the misery and poverty of the primary producing countries, could create recovery in this country.
Our industries will not recover until a large part of the under-developed world receives a proper price for the products which it sends to the West. The Minister of State must know that. The present state of financial affairs is a hindrance to recovery. Three years ago the real rate of interest which a business man would compute when deciding whether to build up his stocks was negative. He could estimate that, if he conducted his business properly, at the end of the year he would benefit more from inflation of the value of his stocks than he would suffer from what he was paying in interest. That is a negative real rate of interest. Under this Government, the real rate of interest for most businesses is approaching a positive 8 per cent., and for small and new businesses, in which the Under-Secretary is rightly interested, it is approaching 9 or 10 per cent. That is a serious negative point when we are talking about industrial recovery.
The perfect example of real inflation is the graveyard, and that is what is happening in many of our regions today. That is why we have initiated this debate. The hon. Member for Chester-le-Street (Mr. Radice) admirably stressed that an incomes policy has an essential part to play in the Labour party's ambitious headline-catching schemes if reflation is to stand any chance at all. We wish that the Labour party would listen to the hon. Member for Chester-le-Street instead of ignoring his persistent and correct plea for an incomes policy.
The hon. Member for Rossendale (Mr. Trippier) was eloquent in support of his own constituents, as he has every right to be, but we do not agree with him in what we regard as his parochial approach to stimulating the economy. The problem can be tackled only on a regional footing. The footwear and textile industries in his area are in danger of losing the base on which their future depends, and that cannot, with respect, be put right just by bringing prosperity to Rossendale.
The hon. Member for Rossendale also made a plea for selective assistance to industries. The trouble is that the selection is done in London by people who are not familiar with industry. In trying to pick winners, they have often put worse money after bad and have misused resources. Decisions should be made in the region.
My right hon. Friend the Member for Crosby (Mrs. Williams) made a constructive rather than partisan speech. She reminded the Government of something that they ought to take to heart—that it is no good smugly comparing their performance with that of some previous Government. That cuts no ice with hard-pressed manufacturers and their work forces today.
What is important, and what the Government never face up to in their smugness, is what our competitors are doing today. My right hon. Friend clearly drew attention to the fact that on all these fronts—research, development, training and the rest—we are underperforming compared with our competitors. The Government are smug about productivity. Any dubious claims that they make for improved productivity pale compared with the immense improvement in competitor nations.
It is important to have a world dimension in our minds when tackling the problem of the collapse of industry in the regions, as my right hon. Friend said.
The hon. Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) was intensely depressing. His broad approach was a polite form of Luddism. He said that for 10 years employment prospects will be blighted by the application of the home computer. When he talks about the computer compared with the clerk, he must remember that, whereas the clerk needs only a pen, somebody must design and make the home computer. It also has to be installed, and if it is to be of any use it must have a terminal to other people's computers. That means a tremendous amount of installation. It also has to be serviced.
My own company went over to computers, reasonably successfully, in 1968. Ever since we seem never to have had the computer supply people out of the premises. Above all—this shows that every invention properly applied increases jobs—the application of advanced technology such as the computer makes things cheaper, and leaves more money in people's pockets to buy other goods and to spend on other services. I do not accept that we must resign ourselves to high unemployment for purely technological reasons.
I understand the concern of the hon. Member for Wolverhampton, North-East (Mrs. Short). Substandard goods undoubtedly get in at our ports. That problem must be solved. I am sure that the hon. Lady does not wish to fall into the error, made by some of our complacent business men when we had an Empire that was forced to buy our goods, that imports are necessarily substandard. A lot of stultifying nonsense has been talked about cheap goods from Hong Kong and Korea, many of which admirably meet the demands of a throw-away society.
The hon. Member for Bromsgrove and Redditch (Mr. Miller) pleaded in an interesting and special way for help for the west midlands, which it very much needs. I greatly regret that two of my hon. Friends have been unable to take part in this brief debate.
The fact is that the way in which the economy is run or not run at the moment does enormous damage to most of our industrial regions because it imposes blanket restrictions on the whole of the United Kingdom which should really apply, if they apply at all, only to one or two regions in the south-east.
The perverse insistence of the Government on keeping an artificially high pound, because of their superstitious reverence for continually falling inflation, may just get by in some prosperous towns of the south-east of England, but it has been disastrous for many of our exporting industries in the regions. Overnight—and I have examples of this which I can gladly let the Minister have—manufacturers who spent years building up foreign markets suddenly found that because of perverse policies on sterling they were priced out of those markets. When that is added to the interest rates which they have been made to pay, their businesses collapse and their workers swell the numbers of unemployed.
When local government tries to palliate this misery and to put some expenditure into the economy to get people into jobs, the Secretary of State for the Environment clobbers them. That has been highly inimical to the regions. The Government have also continued the appalling practice of previous Governments by refusing to let European Community regional aid add substantially to the resources of the regions and have insisted that it must

simply be used as a substitute for what the Government would have paid anyway. A typical example—and I have time to give only one—is the Government's apparent attitude to Manchester's claim for the next big airport. That project would bring real confidence and hope not simply to Manchester—I am not pleading for one particular city—but to the whole of the north of England, yet this opportunity will apparently be allowed to slip by.
The Minister of State lectured us on the evils of excessive Government spending. I understand that Government spending rouses in the mind of any Government supporter terrible guilt feelings about the prodigal waste of money spent on local government reorganisation which the Conservatives initiated and on the wild 1973 overspending in the National Health Service. They are now putting that reorganisation to rights. Another form of extravagance which they went in for included the property boom, which will always be associated with the name of Lord Barber.
The whole point of urging regional expenditure is that the money will be spent in the regions where people know what is going on. It will be spent under their very eyes. I continue to believe that we would never have had the white elephant of the Humber bridge—£100 million to get people to nowhere—had it not been for a centralised decision in this Chamber. That was partisan politics at their worst. Had the decision been taken by a regional administration, the money would have been spent instead on schools, hospitals and other worthwhile projects.
I hope that the Minister winding up the debate will refer to the enterprise allowance, which for far too long has been a tiny pilot scheme, because everyone knows that it would meet a great economic and human need. I also hope that he will say something about development agencies for England. We are full of admiration for the Scottish and Welsh development agencies, and it seems odd that the great regions of England, which are more populous, are denied such admirable bodies.
The Minister might also look at an interesting device which has helped the regions enormously in the past—the regional employment premium. That was a way of keeping sterling strong in London and the south-east while at the same time allowing for a mini-devaluation in the regions. Many hon. Members who were Members at the time of the regional employment premium will testify that it did much to keep regional business healthy.
Excessively high unemployment has continued for a long time. The United Kingdom was the first country to experience serious and self-inflicted slump. The regions that have been worst affected are rapidly losing hope. They now need a sign that the Government have confidence in giving the regions the chance to help themselves. Self-help is supposed to be the motto of the Prime Minister, but she denies the regions any chance of helping themselves. She first knocks them down and then trusses them up so that they cannot even look after some of their own needs. We believe that were the great regions and nations of our country left to choose their own way democratically, they would work together for Britain and help to get themselves and the whole country out of deep depression.

The Under-Secretary of State for Industry (Mr. John MacGregor: Out of courtesy to the Liberal party,


I have agreed to speak briefly. I therefore hope that hon. Members will understand if I am unable to answer all the points that have been made.
It is necessary to look first at the background to regional unemployment, which inevitably means looking at the background of unemployment generally, before looking at the remedies. The hon. Member for Colne Valley (Mr. Wainwright) criticised my right hon. Friend the Minister of State for concentrating on national employment policies, but the hon. Gentleman did precisely the same thing. I therefore hope he will understand if I spend only a short time discussing regional policy specifically.
Although Opposition Members recognise that the recession had a part to play in unemployment, they criticised the Government and drew attention to statistics. It is worth looking beyond the reasons for unemployment, because if we do not get the reasons right we shall not get the remedies right. It is necessary to point out that in the post-war era unemployment has climbed to historically high levels in most other countries. Therefore, a mere recital of the rise in unemployment levels is not an impressive way of dealing with the problem.
Some hon. Members also recognise that, because of the recession, fewer mobile international firms are seeking to take up individual projects. They therefore look sharply at all the factors—not just at the grants—that must be taken into account.

Mrs. Elaine Kellett-Bowman: Last autumn the Government increased Lancaster's derelict land grant from £167,000 to £1·35 million, provided that it was spent by the end of March. Does my hon. Friend accept that if Lancaster had the funding to improve its derelict industrial sites, which he was kind enough to visit, and knew the amount of funding in advance so that it could initiate a smooth programme, it would go a long way towards solving its own employment problems?

Mr. MacGregor: My hon. Friend has made her point and I shall try to respond to it later. I have, of course, seen those problems myself. She will forgive me if I do not interrupt my theme by dealing with that matter now. There is no doubt that what she said is important, and I am glad that she was able to make that point.
We are getting more than our fair share of international companies in this period of world-wide recession. It was interesting that my hon. Friend the Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) was the only hon. Member to refer to the impact of the technological revolution on unemployment. He made a profound speech, which I think the hon. Member for Colne Valley misunderstood. I do not think that my hon. Friend was in any Luddite way resisting this process of change. He was drawing attention to the exciting possibilities that exist and referring to the real challenge of competition involved in meeting that technological change.
Anyone who has visited as many firms as I have in the last two years will have noticed the astonishing speed of change, not only in the processes, but in the products that companies are now making to keep abreast of the markets. That has a profound effect on jobs—a matter that has not been brought out in the debate.
I do not agree with the hon. Member for Rochdale (Mr. Smith) that prior to our taking office there was very little overmanning. Perhaps he was trying to protect

management, but many managers have told me that overmanning did exist and that it was essential that it should be tackled. The same has been said by many ex-employees of firms that have gone out of business. One need only examine the level of overmanning in industries such as the British Steel Corporation and British Leyland prior to 1979, and compare it with international competition, to realise that it must have been a factor in unemployment. [HON. MEMBERS: "That is a management problem."] I acknowledge that it is a management problem, just as restrictive practices were a union problem. The fact is that it existed and had to be dealt with during a difficult economic recession.
Demographic trends currently, but only temporarily, tend to be against us, and a final factor in unemployment, which goes wider than technology, is the speed of change in the types of product in the market place, their design, what they can achieve and the new materials used in their construction. Compared with even 10 or 15 years ago, we now face stiffer and more numerous competition from the newly industrialised countries. Such competition has come from fast moving companies in other industrial competitor nations.
That is demonstrated by British consumers through their choice in the shops, especially if our own companies fail to keep up to date or do not get the design right. The hon. Member for Wolverhampton, North-East (Mrs. Short) was wrong to talk about shoddy goods from overseas. The problem is that many of them are very good, and if we are again to build up our employment that element must be tackled by many companies and their work forces.
It was significant that Opposition Members talked in terms of more Government expenditure. Not one talked about industries and firms producing more effectively the goods that consumers both at home and abroad will buy. The video industry is an example. As was revealed clearly over Christmas, this is the fastest growing consumer market, and consumers in their thousands have demonstrated their desire for those products. Here is a huge potential for jobs, yet decisions—admittedly taken by management as much as by others—not to go into that market were taken during the period of the last Government. There is a lesson to be learnt. We shall create future jobs only by being competitive and aggressive in the market place.
Those are all reasons for the current level of unemployment, including the levels in the regions. If we are to tackle the problem, we must address our minds to all those matters.
It is only fair to say a word about the policy proposals put forward by the Liberal party, as it initiated the debate. Although I did not hear much new in the speech by the hon. Member for Rochdale, he drew attention to the large amount of Government spending on unemployment benefits. He urged the Government to pay the unemployed to work, from the same funds and using the same money. That was an interesting thing to say. Did he mean that he will be looking for work creation schemes, including some of the capital schemes of which he spoke, at wages similar to current unemployment benefit? I must assume that from the phraseology that he used. If he did not mean that, does he not realise that the cost will be very much higher, and the implications for the PSBR and interest rates must immediately be taken into account.
The hon. Member or Rochdale also spoke about a range of schemes involving public expenditure on sewerage and so on. It was a substantial list. As my right hon. Friend the Minister of State said, the Government have significantly increased annual capital expenditure in public sector industries. Such a policy, used purely as a remedy for dealing with unemployment, is expensive. My right hon. Friend the Minister of State referred to the £300 million that we shall be spending on the community programme. That is precisely what the hon. Member for Rochdale recommends, but it does not make a substantial dent, in the way that he seems to imply, on unemployment.
The difficulties about so many of the capital schemes of which the hon. Gentleman spoke is that they are capital and not labour-intensive. He will acknowledge that this is not a magic solution and that the Government have been moving in that direction both in relation to capital expenditure on nationalised industries and through the community programme.

Mrs. Shirley Williams: Would the Under-Secretary of State say that about house improvements, house modernisation and energy conservation, all of which come out at considerably lower cost than the capital investment in motor cars that we have had previously?

Mr. MacGregor: In house improvement under the construction programme one provides—I hate to use the word "creates" in this context—more jobs than many of the major capital-intensive projects. I accept that, but we have introduced some new incentive schemes that move in that direction.
There are limits to the extent to which one can go in any of those directions if one is not to clobber industry in other ways by imposing much higher interest rates and huge extra industrial costs. The hon. Member for Colne Valley shakes his head, but he must know, if he goes out and talks to industry, that that is what industrialists are saying all the time.
I am very sorry indeed that I shall not have time to discuss some of the policy proposals put forward by the hon. Member for Chester-le-Street (Mr. Radice). I hope that he will allow me to concentrate today on the alliance programme.

Mr. David Steel: The Minister is missing the point. My hon. Friend the Member for Rochdale (Mr. Smith) and other hon. Members who have spoken are not saying that we would spend the same amount of money on future employment projects, but that that money would replace completely wasteful expenditure by expenditure that would be productive.

Mr. MacGregor: The hon. Member for Rochdale said "the same funds". It therefore behoves the Liberal party to say exactly where that wasteful expenditure is taking place.
The hon. Member for Colne Valley drew attention to the document "Back to Work", with which I shall now deal. Paragraph 3/19 states:
The money supply would grow somewhat, in order to hold down the rise in interest rates, under our strategy of managing the exchange rate.
On the point about holding down the rise in interest rates, I say to the right hon. Member for Crosby (Mrs. Williams) that it ill-behoves her to attack the Government's loan guarantee scheme on the ground of

interest rates if, through her party's policy, she is advocating only holding down the inevitable rise in interest rates. We believe that it is better to get interest rates down generally and not to introduce certain schemes.
The other point that emerges from the document is that the Liberal party believes that it can pursue a policy of managing exchange rates. Recently, we have had many debates that demonstrate the difficulties of such a policy. The next paragraph of the document says:
The exact rise in interest rates which comes about depends on market opinion and not on mechanical economic relationships.
The House will note that it is talking about a rise in interest rates.

Mr. Richard Wainwright: Read on.

Mr. MacGregor: I have only limited time, as the hon. Gentleman knows. The document has two implications for interest rates and exchange rates that have not been thought through.
The hon. Member for Colne Valley complimented the hon. Member for Chester-le-Street on acknowledging the need for some form of incomes policy. As the hon. Member for Chester-le-Street said, the wording of the document is deliberately vague because the Liberal party knows that that is the Achilles heel of its proposals and that it will be almost impossible to achieve. It has resorted to a fudge of words which it believes will get it the best of all worlds.
Although we have debated Government regional policy a great deal in recent months, it is interesting to compare what the hon. Member for Chester-le-Street wants and what industry wishes. There is a complete contrast. The Labour party offers much higher public expenditure, reflation and much higher interest rates. As one will find from going round firm after firm, what they most want is a strategy of lower inflation, lower general interest rates and action on industrial costs. Firms also wish us to continue with action to improve the supply side of the equation and they recognise the need to improve technology nationally, not just in the regions, important though that is.
The right hon. Member for Crosby got some details wrong. The loan guarantee scheme is directed not only at high technology firms, but also at all small businesses. There are many other ways in which we are devoting resources to improving the impact of technology on industry, through support for innovation schemes—my right hon. Friend the Minister of State, Department of Employment, is doing a great deal in that area—and through the tax system. It is unfair directly to compare the way in which we do things with what happens in other countries, unless the right hon. Lady examines our general policies in providing incentives in the form of grants and allowances for technological innovation.
We have had many regional policy debates and the subject has been much discussed in the House. The Government's position is clear. As the evidence, such as it is, shows, regional policy is more effective if it is concentrated. The hon. Member for Chester-le-Street should examine closely the Labour party's proposals, because he urged that the money should be spread much more widely throughout the country. That is not the best regional policy.
Last year the Government spent £876 million on our regional economic policy. In addition, one must take into


account a large proportion—about 30 per cent.—of the £313 million spent on urban policy, because much of that programme now has a regional and economic impact. It represents significant public expenditure. The fact that we have reduced coverage from 44 to 27 per cent. of the working population has been a clear policy of concentrating on the areas of greatest need.
Many suggestions have been put forward in the debate about regional policy. From the point of view of industry and the regions, it is important that there should be considerable continuity and stability in regional policy. If such policy is always being chopped about, industry has no chance to plan properly. The policy is being carried out over a five-year period.
It is known that the Government are undertaking a review of their policy, as the Opposition and as many other Governments have done. Officials have completed the first stage of the review. That was to examine the working of current regional economic policies and to identify ways in which regional policy might be made more effective. However, we must decide whether to embark upon a second stage of work and it is still far too early to say when that stage will come.
As my hon. Friend the Member for Rossendale (Mr. Trippier) said, the impact on regional policy and the restructuring of local economies of all that we are doing to encourage small businesses and new business start-ups will make a significant contribution to economic regeneration. In all those ways, the Government have a clear and consistent regional economic policy that will succeed.

Mr. Tristan Garel-Jones: I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.

Epsom and Walton Downs Regulation Bill [Lords]

Order for Second Reading read.

7 pm

Mr. Charles Morrison: I beg to move, That the Bill be now read a Second time.
The House may ask why the hon. Member for Devizes has successfully caught your eye, Mr. Speaker, to introduce this Bill. Normally, of course, my hon. Friend the Member for Epsom and Ewell (Mr. Hamilton)) would have introduced the Bill, but he has been struck down by reason of his service in the Government Whips' office. As the House knows, although Whips are silent in the Chamber, they are allowed to speak outside. So it was that one day my hon. Friend's eye fell upon me, all unsuspecting as I was, and as I am always willing to please a Whip—who in this case is much bigger than me—I accepted his invitation to introduce the Bill on behalf of my hon. Friend and its promoters.
I declare a remote interest in that I try to ride horses and I am a member of the British Horse Society. Thus it is not impossible that I might wish to ride on Epsom or Walton downs. Secondly, I have had a minute interest in three horses that might have been Derby horses but were not. That is common to most racehorse owners. It is worth mentioning in passing that while the Derby, which is our greatest flat race, is involved intimately with this Bill, at this time in British racing history the future of our most famous steeplechase is at risk. Unless those who are appealing for money to save the Grand National are successful, we shall see no more Grand Nationals. It is probably out of order to make an appeal from these Benches, but I hope that those who are appealing will achieve great success.
The purpose of the Bill, which is promoted by Epsom and Ewell borough council, is to re-enact with amendments and additions the provisions of the Epsom and Walton Downs Regulation Act 1936, except those provisions that have become redundant. The 1936 Act will cease to have effect shortly by reason of section 262(9) of the Local Government Act 1972—the details of which will be at the finger tips of all hon. Members. This Bill seeks to regulate the various rights and interests over Epsom and Walton downs and to update the provisions of the 1936 Act.
The downs cover an area of some 600 acres. Epsom downs and a small portion of Walton downs are the propery of Metropolitan and Country Racecourse Management and Holding Limited, a wholly owned subsidiary of the Horserace Levy Betting Board, subject to a lease in favour of United Racecourses Ltd. The remainder of Walton downs is owned by Mr. Stanley Wootton, who resides in Australia. He was the owner in 1936 and his part of Walton downs is subject to a lease in favour of the levy board.
Before the passing of the 1936 Act, the downs were the subject of conflicting rights and interests. There were the interests of the Epsom Grand Stand Association Ltd., which has become United Racecourses Ltd., and of the owner, which lay in the use of the downs for horse racing and training. The public also had certain rights of access to the downs for air and exercise under section 193 of the Law of Property Act 1925.
The purpose and achievement of the 1936 Act was threefold. First, it set up a body of conservators with the duty of preserving the downs in their natural state of beauty and with power to make byelaws for the control of the downs. Secondly, the Act continued the rights of the public to air and exercise on the downs since section 193 of the Law of Property Act 1925 ceased to apply to the downs when common rights were extinguished by the 1936 Act. Thirdly, the Act defined the rights of the Epsom Grand Stand Association and of the owner over parts of the downs essential to the continuance of the racing industry and to safeguard other users.
The downs have been famous for horse racing for centuries. The Derby has been held there for more than 200 years and it continues to attract hundreds of thousands of visitors from all over the world and many television viewers. It is probably still the most important flat race in the world, being a major test of horse breeding and stamina and of a trainer's skill. The 1936 Act provides for the maintenance of the training gallops on the downs at the expense of the trainers. Race horse training is a flourishing and important industry in the borough of Epsom and Ewell. Racing provides employment for several hundreds of people in the area.
If the 1936 Act were to lapse, which would be the effect of rejecting this Bill, the position would revert to pre-1936 days, but the downs would not become a common again. The conservators would cease to exist and the public would lose the statutory rights that they now enjoy. Obviously that cannot be seriously contemplated and the rights of the public should not be so prejudiced. To secure the protection of those legitimate interests, the council, with the support of the conservators, United Racecourses Ltd. and the Horserace Betting Levy Board, decided to promote the Bill. Before the Bill was drafted, a working party was set up in 1980 to report on the terms of the Bill to replace the 1936 Act. Extensive consultations were carried out, and, despite conflicting rights and interests, wide agreement was reached. Following consultation and debate, the council, which represents to the best of its ability the interests of the general public, announced the provision in this Bill of a fair compromise among the users of the downs.
The terms of the 1936 Act relating to horse riding were not clear. Therefore, at the request of riders, a provision was included in this Bill to give them statutory rights to ride on extensive areas of the downs.
For the protection of the public, and to prevent danger and damage on the training gallops, the riders would have to keep to the areas and rides referred to in the Bill. Those areas and rides have been extended, at the expense of the training gallops and of the remaining public using the downs for recreation, in an attempt to meet the demands of local riders and were further extended in the other place. A petition against the Bill from the British Horse Society and the Epsom Riders Protection Association, which I believe was formed in 1981, was laid before the House of Lords. The Bill now provides an inalienable legal right which did not exist in the 1936 Act, to ride on the designated areas and rides, which are set out on maps.
The promoters have also given a number of undertakings, including one to set up a consultative committee of representatives of the conservators, United Racecourses Ltd., the Epsom and Walton Downs Training Ground Management Board, the Epsom Riders Protection Association and the British Horse Society for the purpose

of consultation on the future management and control of the tracks, rides, paths and areas for what is termed hack riding.
The only petition to be placed before this House has been that of the Epsom Riders Protection Association. The British Horse Society has not petitioned because I believe that its members consider that a reasonable compromise has now been achieved. It is important, however, to note that the promoters have undertaken to seek further amendments to the Bill to provide that riding on the downs, where hack riding is not permitted, or is permitted only at certain times, should be an offence only under a byelaw confirmed by the Home Secretary. It is proposed that those amendments should be submitted to the Committee to which the Bill will be referred if it is given a Second Reading. The Bill will then be most carefully considered in Committee, and both the promoters and the petitioners will have an opportunity to explain their different attitudes—if they are different—to the various parts of the Bill, and, of course, evidence can be called.
The promoters hope that the Bill will be read a Second time so that they may be allowed to put forward their case in Committee in the usual way. I strongly support them in their endeavours.

Mr. Andrew F. Bennett: I do not at this stage want to oppose the Second Reading of the Bill, but I hope that the promoters will be able to go further than has been suggested by the hon. Member for Devizes (Mr. Morrison) towards meeting the fears and worries of various groups about the Bill. Therefore, I have put my name to the blocking motion that the Bill be read six months hence to ensure a short debate this evening. I hope that there will be no need for the matter to be debated again in the House and that the problems that have been mentioned will be met by the promoters before Report.
Many people have asked why I am concerned with a Bill which deals with a part of the country that I do not represent. I have always taken an interest in questions of rights of way and access, and it is on those grounds that I am concerned about the Bill.
I have no great enthusiasm for horses, whether for racing them or riding them. When I go out walking, I often find that they are a positive nuisance because of the way in which they wear out or damage footpaths. People who have had to clamber over mud that has been created by horses on footpaths may well have some lack of sympathy for them. That is one of the specific problems raised by the Bill. By suggesting that horses should keep to far more firmly defined areas, certain paths or tracks may become even more impassable and difficult for joint use between people who want to ride over them and people who want to walk on them.
I agree with most of the description of the history of the matter that has been given by the hon. Member for Devizes, but I suggest that the promoters could have done one simple thing if they wanted to avoid controversy. They could have promoted a simple enabling Bill to reconstitute the Epsom and Walton Downs Regulation Act 1936, taking into account the local government changes. It would have taken very little time and effort to get it through the House. Indeed, I believe that the Government should have done it. They could have taken all the local government provisions that existed before the local government reorganisation of 1974 and introduced a


simple enabling Bill to extend the provisions to the new authorities. This House has spent far too much time in going back over local government Bills whose duty and need were created merely by local government reorganisation.
The Bill goes considerably further than was strictly necessary. If it had been necessary simply to re-enact the 1936 measure, that could have been done fairly easily. I am well aware that there were several proposals in the Epsom area for inquiries into the way in which the downs were being managed. Many groups have suggested that the 1936 Act was not working particularly well but, as I understand it, the 1966 report on the downs and the council committee report of 1972 decided in the end that on balance the existing form of management and the existing way in which the different conflicts of interest were resolved were fair. In view of that evidence, it would have been better for the promoters of the Bill simply to re-enact the 1936 Act rather than to establish a new set of rules and to alter and vary the balance between the conflicting interests that want to use the downs.
The first area of conflict arises over the interpretation of the 1936 Act as to who has the right of access to air and to exercise on the downs. Is it merely people on foot or is it also people who are hacking? I believe that the clear interpretation of the 1936 Act is that the right of access was there for everyone, and that the right exists over virtually the whole of the area. As hack riders and others are sensible people, a division of the area on realistic grounds has operated over the years and has been fairly effective until relatively recently. The hack riders restricted themselves and kept well clear of the area that can be described as the gallops.
It is unfortunate that the spirit which existed for such a long time could not be re-established. If the promoters had been a little more diplomatic and skilful on occasions, they could have re-established that measure of cooperation, and many of the problems that have been put to me—and, I believe, to many other people—over the past few months would not have had to be voiced in this House.
It is suggested that most local groups were involved in discussions about the preparation of the Bill and that it had the consent of almost everyone. Judging by the correspondence that I have received, that is not the case. There is considerable conflict, some of which is real but some stemming from the fact that, although the workable compromise seemed to be running satisfactorily, once one group of people saw the working compromise threatened from one direction they began to dig in their heels and demand that the letter of the 1936 Act be observed rather than the spirit in which it has operated for a long time. Certainly, from my discussions with the Epsom Riders Protection Association, it seems that they are reasonable people who are asking for reasonable provisions.
I have been surprised by the number of people who have lobbied me saying that I should not take up the time of the House with a discussion of the matter and that the whole issue could easily be settled in favour of the racing lobby. I shall not describe to the House the type of pressures that people have tried to exert but, on the whole, those pressures have been totally counter-productive. Whereas I was in a little doubt about some of the issues before, the way in which some people have suggested to me that I

should take no further interest in the Bill and allow it to proceed shows that they are keen to bulldoze it through the House quickly.
If one reads the reports of the proceedings in the other place, one can fully appreciate some of the fears that have been voiced. One noble Lord suggested that the Derby itself would be at risk if the Bill was not passed. Anyone who has read those proceedings could feel that the racing lobby has pressed its case hard and perhaps did not ensure that the fairest of hearings and considerations were given to the matter. I suggest to those who feel strongly about it and feel that there may be a risk to the racing interests that they should be pressing the promoters to achieve a compromise with the groups concerned rather than spending their time pressuring me and other hon. Members to allow the measure to be passed quickly.
I recognise that the local council is in some difficulty. It would have been nice to have considered it as a totally neutral body in the preparation of the Bill and in the difficulty of trying to reconcile the conflicting interests. It is not a totally neutral body. One or two people have written to me suggesting—I am sure unfairly—that the council is more concerned about its box in the grandstand than in trying to hold the ring between the different conflicting interests. I recognise that the council has to consider the jobs involved. The racing industry has lobbied hard about the number of jobs involved in the training establishments and the number of jobs involved on racing days. That is an important consideration for any local council, but I suggest that the local council should have looked a little more closely at the number of jobs involved in the riding stables, for hacking horses and the tuition of young people. Perhaps the council could have been a little more neutral in its consideration.

Mr. Clement Freud: Does the hon. Gentleman accept that, whereas one can hack virtually anywhere, one can train racehorses and race only on that particular stretch of land?

Mr. Bennett: I accept that the racecourse is important for the promotion of all the races and, in particular, the Derby. No one would dispute that. But the case for all the trainers using that particular area of land is not quite so overwhelming, because, as I understand it, there are other private areas within the vicinity of some of the stables used by some of the trainers. Therefore, it is not essential that they use those areas. I am certain that the hon. Member for Isle of Ely (Mr. Freud), who knows far more about these matters than I do, is aware that in other parts of the country there are many other opportunities for training horses. For most of those living in that area there is some limit on the distance that they can go or their children can go if they want to enjoy horse riding. In Stockport, there are certain areas which are over-used by young riders because they cannot get out further to areas which may not be used so much because of expense, difficulties with transport, and so on. It is a matter of balance as to how large an area should be for training.
I am also under the impression that the number of horses being trained in the area has dramatically fallen since 1936 when, I am told, more than 1,000 horses were being trained. Now the figure is down to between 300 and 400. I do not know a great deal about the racing industry. Perhaps the training is now much more vigorous and scientific than it was then and that therefore the amount


of space required has increased. The figures therefore may not be a perfect guide, but they suggest that there has been some decline. Therefore, it should be possible to try to marry the two sets of interests—the legitimate interests of those who want to train horses and the rights of individuals to go on to the downs for their own pleasure of simply riding a horse.
There is still an opportunity for the council and the promoters to get together with the protection association and to reach an agreement before the Bill even reaches Committee. If, as I am continually told by those who are keen to see the Bill rushed through, the matter is urgent, there is a quick and simple way for the promoters to proceed—they should get agreement from all interests. If they achieve agreement, they can go to Committee with the petition withdrawn and an agreed set of amendments. There may have to be short Committee proceedings while the Government Departments make their representations, although my understanding is that Departments do not have many observations to make about the Bill and that therefore the Bill could go through Committee quickly. With controversy out of the way, the Bill could return to the Floor of the House for Report and Third Reading without further delay.
My guess is that, if the promoters followed that course, they would have their Bill by early March. Therefore, if the matter is urgent, that would be a sensible way for the promoters to proceed. If, on the other hand, they are not prepared to try to meet the legitimate rights of individuals in the area, they may well delay their Bill considerably. If the petition has to be heard by the Committee, and it is heard in the detail in which petitions are normally heard—some of those who present the arguments on such petitions, particularly on occasion councils, seem to enjoy arguing at length—the proceedings in Committee may take a considerable time. If at the end of that there is still dissatisfaction, the Bill will have to return to the Floor of the House for Third Reading and for amendments to be tabled and debated, which, again, can take a considerable time. It is a cumbersome process which takes time and costs money.
I should have hoped that the promoters could meet the legitimate views of those who are unhappy about the Bill and thus avoid that long and cumbersome process, particularly if, as it is continually rumoured, there might be an early election which could interrupt that fairly long process.
The riders' protection association believes that the areas designated in the Bill for hack riding are inadequate and too restricted. The maps of the areas available under the 1936 Act and those proposed in the Bill show that the total area has been greatly reduced. It has been suggested that the riders have 40 miles of routes, but those are generally routeways or pathways rather than open areas.
If riders are restricted to using the same small pathways all the time, those routes will become worn fairly quickly and problems will arise over preserving the routes and closing them for resurfacing. Previously riders were free to spread out over a much wider area. It could be argued that in those circumstances damage would be spread over a wider area, but it could also be claimed that less damage was done and natural regeneration was easier. I am told that more damage has been caused to the downs by excavations and the all-weather rides for the training of horses than by hack riders.
Hack riders are also worried about the fact that two or three maps showing designated areas will he put in legislation. We know the present number of horses being trained in the area and the number of hack riders on the downs, but those numbers may vary considerably over the next 10 or 15 years. More people may wish to hack over the area and there may be fewer horses trained in the area. In addition, some trainers may prefer to use private training areas rather than the downs. It has been put to me that it would be better for such matters to be dealt with in local byelaws than in an Act.
The riders' protection association tells me that five sixths of the area that riders were entitled to use will be lost and that much of the natural beauty of the area has been reduced. Many wild flowers and shrubs that were features of the area have disappeared, not because of the hacking on the downs but because of the training of horses and the use of the racecourse.
It should be possible for the promoters to ease the fears of the riders and to reach agreement with them in the next day or two. The minimum requirements include a proper route along the south side of Walton downs, which must be considerably wider than is currently proposed—perhaps going back to the width provided in the 1936 Act—and riders not being restricted to narrow routes that will be difficult to negotiate at most times. That could be best achieved by reverting to the wording of the 1936 Act which provided rights for walkers and riders. There could then be local negotiations on byelaws to serve the interests of trainers, the racecourse and local hack riders. Such byelaws could be varied from time to time as needs changed. The removal of the right of access on foot or horseback will make it much harder for those who wish to press the rights of hack riders to negotiate on their behalf.
One clause includes the right to close the 40 miles of rides for reseeding. The Bill should be tightened up to make it clear that, as at present, if an area has to be regrassed an alternative route ought to be made available. There may be occasions when that is not possible, but there ought to be a presumption that if a designated route has to be closed alternatives should be provided.
The riders' protection association and others are worried about the proposals to increase the number of race meetings at Epsom. Most people who attend sports meetings thoroughly enjoy themselves, but there are sometimes problems for those living near sports grounds and racecourses. I get the impression that the Epsom course is no exception.
A major problem is the time taken in preparing for a race meeting and clearing up afterwards. At present, there are nine days of racing a year, but the Bill proposes a possible extension to 16 days. I suspect that most people would not object to such an extension, but if there are to be 10 days of preparation and 10 days of clearing up for each meeting, many of the areas designated in the Bill will be restricted for large parts of the year. It ought to be possible for those 10-day periods to be reduced. I understand that it is not proposed to move immediately from nine days to 16 days, but I understand the legitimate fears of local people.
It would be fairly easy for the promoters to give an undertaking that if they press for extra days the preparation and clearing-up time will be reduced, along with the restrictions on hack riders and other groups. I have received a number of letters about the restoration of the


downs after race meetings. People have tripped over holes left after the removal of pegs used in temporary structures at Epsom.
I have also received a letter about third party liability of hack riders and horse trainers. I do not think that there should be any problem about that. Most riders are members of their national association and have insurance cover and any race horse trainer will have third party liability because of the nature of his trade. It is not one that I should want to press.
I hope that the promoters will make it clear that they wish to change all the penalties from criminal offences to byelaw offences. I understand that the hon. Member for Devizes received an undertaking along those lines, but that in correspondence later the promoters suggested that they were changing only one of the provisions, not both. I hope that that misunderstanding can be cleared up.
I should not like to see a measure such as this held up or delayed in any way. It is important that the promoters get together in urgent discussions with the petitioners to ensure that any differences of view can be resolved. I do not believe that they cannot be resolved because I am under the impression that the Epsom Riders Protection Association is made up of reasonable people and that the promoters could get their point across so that there might be better management of the area in the interests of the trainers, the racing fraternity and the people of the area, not only those who wish to hack but the far larger majority who wish to walk. I hope that the Bill will not have to come back to the House for us to argue over a further stage because of failure to reach agreement between all the interested parties.

Mr. George Gardiner: Like the hon. Member for Stockport, North (Mr. Bennett), I am glad that the House has a chance to discuss the Bill before it goes further. I certainly supported the hon. Member in his efforts to block the Bill to ensure that such a debate could take place.
Perhaps I should explain my constituents' interest in this measure. It could be divided into two. First, there is a ward in my constituency lying to the east of the downs, and thus to the east of the racecourse, which is, not surprisingly, called Tattenhams ward. Whatever goes on on the downs, whether of a racing nature or anything else, has a direct effect upon the lives of the people in that ward. Secondly, throughout my constituency there are many more who use the downs for recreational purposes, whether on horseback or on foot.
I am sure that we are grateful to my hon. Friend the Member for Devizes (Mr. Morrison) for explaining in his introductory speech the conflicting interests that occur. These conflicts are not necessarily simple to define. We have, understandably, heard a good deal of a conflict between the horse racing industry and the public as a whole. It is fair to say as well that there is a conflict within the public interest. There is often a conflict between those who use the downs for their recreation on horseback and those who go on the downs on foot.
We have heard of a number of hazardous episodes reported in the local press over recent years, where horse riders have come dangerously close to families who are picknicking or walking on the downs. I can tell hon.

Members that my constituency mailbag on this issue divides fairly evenly between hack riders complaining about the activities of conservators and the Epsom and Ewell borough council, and members of the public on foot—the pedestrian public—complaining about the activities of the hack riders. There are a number of facets to the conflict here.
It is also worth mentioning in this context that it is not entirely sensible to argue that the problem could be met simply by enabling legislation to renew the 1936 Act. The recreational use being made of this area is now far heavier than it was in those days. Far more people drive out from London and from the different parts of my constituency to the downs for recreational purposes at the weekend. At the same time, there has been an expansion in the popularity of hack riding. The public demands being put on the downs are now far greater than they were only a few years ago.
The bodies that have endeavoured to represent the interests of local residents in the process of formulating new legislation are the residents' associations, and I include among these the Tattenhams residents' association drawn from the ward that I have described. It will be within the knowledge of most hon. Members that that residents' association joined with others outside my constituency, associations that are similarly affected by whatever goes on on the downs, into a joint committee that met through 1980ߝ81 to draw up and define their requirements.
The representatives of that joint committee got together with the working party described by my hon. Friend the Member for Devizes in the middle of 1981 and a compromise between those interests was worked out. The compromise covered agreement on such matters as car parking, the erection and removal of temporary stands, the fencing of enclosures and the protection of residents close to the racecourse. A great deal of work was put into that by representatives of residents' associations.
I am now finding considerable hostility expressed from those quarters to making many more compromises in the process of getting the Bill on the statute book. As one of them put it to me in a letter that I received just before Christmas,
Our Joint Committee went to considerable trouble to achieve the best possible provisions in the new Bill so as to equally serve all interests. This meant making concessions at times which must not be jeopardized by one minority seeking to obtain a disproportionate advantage for only their activity.
That is the view that is coming fairly strongly from the residents' association.
As the hon. Member for Stockport, North fairly told the House, there are problems remaining concerning the hack riders. One particular objection was that any offences in the Bill, as put before another place, brought down the wrath of the criminal law upon offenders, which was seen as a disproportionate penalty or legal sanction to be applied. I am sure that we shall be interested to see the form that the concession on this point takes when the Bill goes before a Committee.
The hon. Member for Stockport, North has stated in some detail, and therefore I shall not repeat it, that the Epsom Riders Protection Association is not satisfied with the Bill and the degree of access that is allowed to it under the proposed measure, and wishes to pursue the matter


further. Thereby, it finds itself unfortunately in conflict, not only with the promoters of the Bill, but with the representatives of local residents associations, too.
At this juncture, it may be said, without prejudging the issue, that the correspondence that I received before the Bill came before the House demonstrates that among hack riders and members of the Epsom Riders Protection Association there is a very strong feeling that a certain vendetta has been waged against them by the conservators over a period of time under the 1936 Act, and there is a feeling among them that the provisions of the 1936 Act have been bent on certain occasions to their disadvantage. Such a feeling in those circumstances hardly creates the most friendly atmosphere for the amicable discussion of the proposed provisions of a new measure which, nevertheless, I believe to be necessary. My hon. Friend the Member for Devizes was correct to point to the hazardous situation that we would face if the 1936 Act were allowed to lapse without being replaced by some further legislation.
Understandably, the argument has been in terms of the conflict involving hack riders, but there are other provisions in the Bill which are of great importance to some of my constituents. I refer especially to clause 16, which covers the gipsy caravans which arrive in very large numbers for the annual Derby meeting.
Very soon after I was elected to the House in 1974, I discovered that this was a matter of considerable aggravation for my constituents living in the area not far from and adjacent to the racecourse. These caravans are not the picturesque conveyances which might have come to the downs meeting in years gone past but large and luxurious mobile homes often needing to be towed by heavy lorries, and often bringing noisy, heavy generating equipment with them. Increasing numbers of such caravans were coming each year. They were causing considerable aggravation for local residents, and the presence of caravans dotted round the downs in an uncontrolled way also inhibited their freedom to use the downs for recreational purposes. Over the years since, efforts have been made through the gipsy authorities to reduce the numbers arriving, and we thought that those efforts were achieving some success until 1981, when a record number of caravans came for the Derby meeting. There were some 347 in all. Furthermore, they arrive not just for the Derby meeting but a considerable time beforehand, and they stay for some time afterwards.
My constituents living locally will welcome the provisions in clause 16, which have been worked out in consultation with the National Gypsy Council, for a properly constituted site for such caravans and for power to require the removal of caravans that are not situated within that designated area. I offer that as at least one example of the reason why local residents require fresh legislation. The 1936 Act was not adequate to meet their needs in this respect.
This argument has been a long and painful business for many of us. I should like to think that the difficulties can be resolved before the Bill goes before a Committee, as did the hon. Member for Stockport, North, though I have my doubts. One of the reasons why I was happy to promise my support in blocking the Second Reading of this measure before Christmas was that that allowed additional time for the promoters' and the petitioners' agents to meet to see whether some agreement could be reached. Unhappily, it appears to have been impossible, so I

imagine there is no alternative now but for these issues to go before a Committee. We hope that they will be resolved there.
I join other hon. Members in hoping that the Committee will succeed in reconciling the conflicts which remain over the measure so that we can get an Epsom and Walton Downs Regulation Bill on the statute book in the interests of the public as a whole.

Mr. Clement Freud: Unlike the hon. Members for Reigate (Mr. Gardiner) and Stockport, North (Mr. Bennett), I am totally in favour of this measure. I should very much like to see it enacted sooner than later, and I agree with the hon. Members in hoping that it will not go before a Select Committee.
It is crucial to remember that the very reason for Epsom's prosperity and existence is horse racing. We have 600 acres of downs. We have fairly co-operative trainers. But it is important to remember that Epsom is about training race horses. Race horses are trained and spectacles are put on which attract people, to the great financial benefit of the surrounding district. Inevitably, considerable annoyance is caused to people who live nearby. But that is common to every event anywhere. It is common to every theatrical performance, every jamboree and every concert. I am sure that our neighbours in Westminster infinitely prefer it when the House is not sitting. I am surprised that we have not had a petition asking us to have shorter sittings and to stop banging car doors at night.
Racing and Epsom are synonimous. If there is as much room for hacking, let those hacks hack where there is space and where they do not interfere with valuable bloodstock in the very limited space provided on which race horses may gallop. The hon. Member for Stockport, North had some sort of idea that horses could race anywhere and that hacks could hack anywhere. He suggested that there were trainers who did not need the gallops on the downs. I agree that there are, but they belong to the up-market branch of racing. The small trainer has no chance to buy land on which to race his horses. He needs the facility of the downs and he needs the security of those gallops. It is exceedingly dangerous for a race horse to be unleashed on a 1¼-mile gallop and find people walking, hacking or flying model aeroplanes there.
It is right that precedence should be given to race horses. Trainers are very good. They do not train horses in the afternoons, but they would not expect the hacks to churn up the gallops any more than a race horse should be allowed to train on ground which was not suited to it.
A faint elitism has crept into the debate, as though hacks were Socialist and racing was somehow Conservative or up-market. It is quite wrong to suggest that. It costs £10 an hour to hack. I am not sure that it is not the hacks that are the elite and the race horses that are the working part of Epsom.

Mr. John Golding: Will the hon. Gentleman accept my assurance that in my constituency at least there will be far more support for the stable boys and the horses than for the young girls and hacks?

Mr. Freud: I am glad to hear that. As the hon. Member for Devizes (Mr. Morrison) declared an interest, I suppose


that I, too, should declare an interest in that I have owned horses for many years, I have ridden horses, and if I were younger and thinner and a better jockey I should still be riding horses, and I would hope very much to ride at Epsom. However, that is unlikely.
I want to see Epsom to go on as an amenity, first, so that trainers can train their horses safely, apart from the provision of other facilities on the racecourse. Secondly, I ask that consideration be given to those who hack and those who walk and those who fly model aeroplanes and those who make love in the dark, and those gipsies who have their caravans there, because that is all part and parcel of the Epsom as we know and love it. I hope that the Bill will be given a speedy passage through the House.

The Under-Secretary of State for the Environment (Mr. Neil Macfarlane): I hope that it will help the House if I make a brief intervention now to give the Government's views and to applaud the way in which my hon. Friend the Member for Devizes (Mr. Morrison) introduced the Bill. I must emphasise that the Bill is a private Bill, promoted jointly by Epsom and Ewell borough council and United Racecourses Ltd. They are the leaseholder and operator of the Epsom downs racecourse. It is important to understand the background, because the Bill repeals and re-enacts, with amendments, an existing regulation Act of 1936, which would otherwise have lapsed at the end of 1984 as a result of section 262 of the Local Government Act 1972.
The Bill contains a wide range of provisions concerning regulation of the use of the downs, and under the 1936 Act and the Bill the downs are controlled by a body of conservators composed of representatives of the borough council, United Racecourses Ltd., and the owner of part of the downs. I make it clear that I have a dual interest—not only as spokesman on behalf of the Government, but as a near neighbour of my hon. Friends the Members for Epsom and Ewell (Mr. Hamilton) and for Reigate (Mr. Gardiner). In fact, the downs form one of the high parts of the boundary between our constituencies. Certainly it is a most important part of the region for our respective constituents, so all of us have a detailed interest in this important lung for the people who live on the outskirts of London and on the threshold of Surrey.
What has been said by hon. Members on both sides echoes the fact that we acknowledge the traditions and the vital importance of Epsom downs for horse racing, the training of race horses, and horse racing generally, as well as being a focal point for a host of varied recreation and leisure pursuits. I agree with my hon. Friend the Member for Devizes that the Derby is the focal point of the flat racing season, and I admired his customary eloquence and resourcefulness in managing to get in an important reference to the Grand National, which is held in an area which is diametrically opposed to ours, the north-west of England. I echo his assessment that that important steeplechase should be preserved to form part of "Great Britain Ltd.," and I hope that all those who are involved will acknowledge that.
All of the activities that now take place on Epsom downs must help the local economy, and between them they provide immense pleasure for many thousands of people. The downs are a valuable asset to the area, and

they are an international focal point on Derby day. At that time of the year they are a sight that is never to be forgotten.
However, the House should understand that the varied nature of the pressures on the downs must bring its problems. I am sure that the conservators are right in wanting to continue and improve the regulation of the downs in a way that reconciles the interests of the various users. I congratulate them on bringing forward a comprehensive Bill which is uncontroversial to such a large extent.
If there is a slightly controversial area, it is the one to which my hon. Friend the Member for Reigate referred when he spoke of the anxiety of his constituents—and, to a certain extent, the anxiety that my constituents would express—about the problems of controlling gipsy caravans. I am glad that he noted that the Government, too, echoed the concern that the promoters' proposals should not set a precedent for powers in excess of those normally available to local authorities once their areas achieved designation under the Caravan Sites Act 1968.
Following discussions with the promoters, however, we are now persuaded that in the special circumstances surrounding the Derby meeting at Epsom, a measure of special control is justified, and the Bill as amended in another place includes powers to deal speedily with any problems caused by the haphazard parking of caravans on the downs outside the official caravan site area on which my hon. Friend touched. However, we did not feel able to condone extensive powers to deal with other lesser problems such as compliance with site conditions. The Committee in another place reflected the Government's view by curtailing the powers originally proposed in that Bill.
I said that a number of the measures were largely uncontroversial, but I recognise the inherent concern expressed on behalf of horse riders. A number of hon. Members have spoken this evening and many have written to me on this matter, and I appreciate and respect their feelings. Naturally, horse riders seek as much freedom as possible to continue to ride across the downs. Nevertheless, it is not for me on behalf of the Government to judge whether the conservators' proposals for controlling hack riding are justified. If the House gives the Bill a Second Reading, I believe that the conservators will be required to demonstrate to the Committee the justification for the proposals. I am sure that many people who are deeply worried about this matter will welcome the assurances that my hon. Friend the Member for Devizes gave in his opening remarks. Equally, the Epsom Riders Protection Association, which petitioned against the Bill, together with the conservators will have an opportunity to present their case to the Committee. I am confident, and I think it echoes the sentiments of Members on both sides, that the Committee will give a hearing to both sides. I hope that hon. Members will understand that I recommend that the Bill be given a Second Reading so that the issues may be fully discussed in Committee.

Mr. Denis Howell: I welcome the Bill and commend it to my right hon. and hon. Friends. In saying that, I entirely agree with the course taken by my hon. Friend the Member for Stockport, North (Mr. Bennett), enabling us to have a rare debate on sporting matters and related conservation matters, to


which the House should give much more time. For that reason alone I am glad that he has provided us with an opportunity to listen to the discussions and arguments, although I do not share my hon. Friend's views on many points, as will emerge in my speech.
First, the Derby is affected. My hon. Friend said that it was not affected by the Bill. It is affected, and it is affected for the good. That is one reason why I support the Bill. The Derby is one of the great sporting festivals of this nation. The Minister said, and I took the same view when I was in office, that the great sporting festivals of our country are to be cherished, supported and improved. We all feel well, not just because we back the winner, but because the British put on these great sporting occasions as only they can do. That is a source of great national pleasure and pride. It is important to make that point.

Mr. Harry Greenway: May I say, in defence of the right hon. Gentleman's hon. Friend the Member for Stockport, North (Mr. Bennett), that I am sure he would agree that the Derby has in no sense been threatened in recent years. There is no threat to the Derby whatsoever, and in that sense his hon. Friend was quite right.

Mr. Howell: I hope that I have made it quite clear, and I shall enlarge my views in a moment. The Derby will be affected for the better as a result of the Bill. I agree that my hon. Friend is not trying to do anything that would impede the continuance of the Derby as one of the great national sporting occasions. I know that to be the case. One or two tributes should be paid to people involved in the long history of the matter. Now that the Bill tries to reconcile different interests, tribute should be paid to Mr. Stanley Wootton, a noted trainer, who, in a most remarkable gesture, made much of this land available for all time on a 999-year lease at a peppercorn rent. It would be wrong if hon. Members failed to express their appreciation of that wonderful gesture. It was the action of someone who wished to leave a heritage for future generations.
I was interested to receive a letter from the mayor of Epsom and Ewell, one of the few Labour mayors in that borough's history. I think that he is, in fact, the third Labour mayor, on which he should be congratulated. One of his most illustrious predecessors was a colleague, Mr. Chuter Ede, who, I recall, discussed these matters with me. This shows how long back into history these issues go, as well as revealing my age. It was Mr. Chuter Ede who proposed that action should be taken to close the downs on certain occasions and to introduce regulations in the interest of racing, of which he was a keen follower. These matters were pursued during my time as Minister by two distinguished chairmen of the Horserace Betting Levy Board, Lord Wigg and Lord Plummer. Both have been concerned to obtain the support of the House for the type of proposals contained in the Bill.
Why do I say that the Bill enhances the prospects of the Derby? There has been mention of gipsies. Ministers within the Department of the Environment are never far removed from the gipsy problem, as the Minister, the hon. Member for Reigate (Mr. Gardiner) and I know. I congratulate the local authority and the conservators on managing to achieve a sensible agreement with the National Gypsy Council. That is a most remarkable achievement. It is a credit to the local authority, the

conservators and the gypsy council that the problem can apparently be resolved by providing a site for at least 200 caravans with the proper facilities that are so desperately needed. This must benefit local inhabitants and everyone else.
The second reason that the Bill is important is that it takes powers on race days to restrict access and improve facilities along a strip of land following the course from Tattenham Corner to the finish. That is years overdue. One sees from the grandstand, especially on Derby day, disgraceful scenes of ladies having to queue up for totally inadequate public conveniences. It is shocking that one of our great sporting events provides such appalling facilities for the public. I understand that the Bill proposes to take action to remedy that matter. It has to be remembered that 100,000 people are present on Derby day. It is right that they should have adequate and proper facilities. I understand from my talks with the promoters that improved facilities on this strip of land is one of the main objectives. That will be welcomed by everyone in sport, not least by those who are so inconvenienced by lack of elementary civilised amenities.
I wish now to deal with some of the difficulties that seem to have arisen. I share the general view that these difficulties can probably be explored at greater length in Committee. If, however, one studies the proceedings that have taken place in the other place, it will be seen that considerable progress has already been made. It would be wrong to suggest that hon. Members should start discussions and arguments de novo. We are doing no such thing. As the second Chamber to receive the Bill, we should acknowledge concessions that have already been made without in any way seeking to prevent the objectors, in this case, the Epsom Riders Protection Association, from pursuing their points. I understand that the British Horse Society—several hon. Members are among its supporters—have now dropped an objection that was raised in the other place. This suggests that considerable concessions have been obtained, at any rate, to the society's satisfaction.
For the first time, all these miles of rides are hallowed in statute. About 80 acres out of a total of 600 acres are allocated for riding, associated with 12 miles of rides. That provision is no small contribution to the leisure activities of the horse riders, whom many hon. Members support.

Mr. Greenway: The council of the British Horse Society, on which I am a serving member, stood on an objection to the provisions in the Bill which would make trespass on the downs in areas not assigned to hack riders a criminal offence. The council stated that if the promoters withdrew that provision it would withdraw its objection to the Bill. That is how matters stand. I shall have something more to say if I am successful in catching Mr. Deputy Speaker's eye.

Mr. Howell: That is a matter, I am sure, that can be discussed in Committee. I have tried to inform myself about the situation. We are talking, I understand, of an offence that would be dealt with in the same court and would be subject to the same fine. The question is whether it would be an offence against the byelaw or an offence against the Act. The effect on the offender would be the same in either case. I can understand that some people should think it better that the offence should be dealt with by means of a byelaw. The issue should be pursued in Committee.
I am critical of the manner in which the Epsom Riders Protection Association has shaped its objections. Its letter seems to suggest that the Bill is concerned with the gain of the racing industry. It says:
Unfortunately, the Council have backed a small industry.
This is not a small industry. It is an industry that attracts the active involvement and interest of millions of people who want a sensible, honest and honourable flutter once or twice a year. It is therefore wrong for the letter to use the description that it does. It is unfortunate that the association has drafted its objection in those terms. As the House has heard, 100,000 people turn up on the major occasion. Many thousands turn up when there is no racing at all to enjoy picnicking or walking on the downs. All our life in sport is spent in reconciling conflicting interests. In this case, there are conflicting interests to be resolved between horse riders and picnickers on bank holidays and other days when people wish to visit the downs.
Racing is a major industry. It is one of our great successes and ought not to be described as it was in that letter. There has been reference to the commercial interests of racing, as if there were no other commercial interests operating on the downs. Most of the riders represent a commercial interest in one way or another. There is a commercial interest in providing and housing horses. Horse trainers pay £130 a year for each horse that uses the downs, whereas—I am not suggesting that they should pay anything—all ordinary horse riders pay nothing for access.
We must remember also that the horse riders are not limited to Epsom downs, as are the horse trainers. Small horse trainers must have gallops over Epsom downs, whereas hack riders have a considerable amount of ground available in the near proximity, for example, Headley heath, Banstead common and Epsom common and the acres of open space now known as Mole valley. That is all additional space, which is available to those people who wish to ride horses.
Specific differences exist in relation to the width of the horse rides. We know that they should be adequate and that ground suffers if people trample over the same ground all the time. I am advised that most of the horse rides go over the golf course. We have spent a great deal of time talking about the interests of the racing fraternity and horse riders, but we must consider also the interests of the golfers.
I am told that the golf club would object strongly to an unduly wide access road going across the golf course. As a golfer of little performance, I believe that anything that increases hazards for ordinary golfers is something that the House should look at with suspicion. So far as I can see, that would arise here.

Mr. Andrew F. Bennett: Has there been any problem during the past five years between hack riders and golfers? As I understand it, that has not been a major problem.

Mr. Howell: One of the differences that still remains is the width of the ride. I am told that the Epsom Riders Protection Association wishes to provide rides of 20 metres wide for the horses. That is about the width of a cricket pitch and the golfers say that that is far too wide for any one of the rides across the golf course. That problem can no doubt be examined in Committee. If those

facts are accurate, I have a great deal of sympathy for the golfers and their interests vis a vis trainers and horse riders, and it is something that the House must consider.

Mr. Bennett: On that part of the golf course, custom and practice, which have been observed effectively, are that riders never stray on to the fairways, but have been able to ride over much of the rest of the course without causing any problems. That is what they want to continue. They do not want to encroach on to the golf course because of their wish to protect the interests of both the golfers and themselves.

Mr. Howell: That does not coincide with the information that I have been given. I have been told that there have been some difficulties, but that on the whole they have been solved with good will. If the 12 miles of rides are to be 20 metres wide, there would be considerable difficulties for the golfers. It is a point that needs to be looked at in Committee but that point should be made now.

Mr. Greenway: I know that the right hon. Gentleman shows great good will in these matters. If he supports a view that 20 metres is too wide, what is an adequate width?

Mr. Howell: I should not like to answer that. One of the points to be looked at in Committee is the surface upon which horses are ridden at certain critical points near the golf course. I am told that there are about 100 riders continually ploughing up one small area. One point that ought to be investigated is whether a rather more suitable surface should be provided, which would mean that 20 metres would not be needed. Horses could use a narrower ride if there were a proper surface. That is the sort of give-and-take solution that I should have thought reasonable.
Another point about which there may be some difference is the desire of some riders to remove the restriction that they cannot gallop before 12 noon. That brings us to a matter of considerable importance. Those of us who have an interest in racing know that a highly trained racehorse is a delicate animal. One therefore has to have regard to proper control at all times. I should have thought that it was wrong for hack riders to be on the downs when they are being used for training. Hack riders should not go on to land that has not yet been galloped on but which will be galloped on within the next day or two or week or two. Those of us who have been to Epsom downs to see the training know that there is a sensible system of giving the trainers an extra yard or two of new ground each day. If the hack riders go on to the new land before it has been used by the race horses considerable damage may be done.
This is a good measure to have reached the House. For many years many people have tried to legislate sensibly for the racing industry, which is of great importance and interest to the country. They have done it in discussions with diverse bodies such as consumers, the local authority, the National Gypsy Council, golfers, model aircraft fliers and people representing conservation and amenity interests. Despite the great conflicts that exist, a commendable Bill has been brought before us. I am pleased that concessions were made in another place. I hope that in Committee, which is the right place, there can be further discussions to reach as much agreement as is possible. However, at the end of the day I have not the slightest doubt that it is in the national sporting interest for the Bill to be put on the statute book.

Mr. W. R. Rees-Davies: I shall be brief, because the arguments have been well canvassed. I, like many hon. Members, have had to read a great many Bills, but I have seldom seen a better drafted, more comprehensive and better presented Bill. One must thank United Racecourses Ltd., the Horserace Betting Levy Board, the conservators, Epsom and Ewell borough council, and the eminent solicitors, Messrs. Sharpe, Pritchard  Co.—indeed, all those associated with the production and promotion of the Bill, not least my hon. Friend the Member for Devizes (Mr. Morrison) for the way in which he has presented the Bill to the House this evening.
One matter that has been touched upon but not dealt with fully is the problem that arises from the fact that the Epsom downs are not only a national but an international institution. Last year I had the pleasure of shepherding 200 American tourists there in three large buses. I had a drink with them and told them something about the downs. I am happy to say that I had been given the winner, so I gave it to them as well, which made me all the more popular. People come from all over the world, not just for the Derby, but to use Epsom downs in many ways.
Clause 11 deals with byelaws and is extraordinarily well drawn, as is the one about the gipsies. They need to be effectively controlled and to do that is a difficult task, as has been said. Immeasurable trouble has been taken to see that everybody's interests are considered fairly. United Racecourses Ltd. is beginning to make considerable improvements at Epsom. It is right that it should take the power to have 16 days racing.
Some years ago I was a member, and had been for a good many years, of the Epsom racecourse. At one time I had a box there, although I cannot afford one any longer. No doubt my hon. Friend the Member for Epsom and Ewell (Mr. Hamilton) will be there at the right moment to enable us to have a box during the Epsom meeting. I do not think that he has a box, but, as the Member of Parliament for Epsom and Ewell, I hope that he has certain privileges on that occasion, and rightly so too.
We need more racing days. Therefore, I hope that the trainers and those associated with Epsom will expand somewhat in the years ahead, despite a slight falling off in the past. I hope that Mr. Neligan and those associated with him will be able to ensure that the number of racing days is increased.
Clause 10 allows the conservators to consider the use of the downs for any recreational purposes that are thought proper. There is a specific provision that the downs cannot be so used for more than five days in any one year and that
not more than 25 hectares of the downs shall be set apart for the holding of any such event.
Both here and at Liverpool, for the Grand National, it is necessary to ensure that the fullest and most effective use is made of the land for recreation for the enjoyment of the public.
Nowadays, all those involved with racecourses are trying to find ways to make effective use of the courses when they are not being used for racing. I hope that greater use will be made of them. Nevertheless, the byelaws set down careful controls. In this modern age, unlike the days of 1936, one wants effective regulations to ensure that there is effective control over not only the racecourse but the full 600 acres.
It has been said that golfers have a golf course on the downs. They are entitled to their golfing under conditions that are reasonable and effective.
It is right that those who want to hack should be able to do so, but they must recognise that it is far better to set an area apart for them at times that are suitable than to give them the opportunity to roam at large. That would be most unsatisfactory.
There must be effective control over camping, caravanning and the selling, hawking and hiring of commodities. In the last century there used to be many pornographic shows on Epsom downs on Derby day and others. There were all types of tenting and hawking, and little control. Many criminal offences were perpetrated. Happily, there is now effective control over that major international event.
I hope that the Bill will pass through the House without any great difficulty. It is a measure of the success of the sponsor and promoters that, with the exception of hacking, they have managed to achieve the support of local people as well as the general public. There is no need to make trespassing a criminal offence. Substantial fines can be quite sufficient. I give a warm blessing to the Bill and hope that it will become law soon, without any great opposition.

Mr. John Ryman: I had not intended to speak, but I have to say that I strongly support the Bill. Without covering the ground that has been covered by hon. Members on both sides of the House, I should like to draw attention to the parlous state of British racing. The industry is unhealthy and needs every conceivable aid that is available, both from the House and from the Government.
In foreign racing, the prizes are much higher than in Britain and they have the benefit of our bloodstock expertise. As the Rothschild commission reported to the House some years go, the prospects for British racing are poor and every effort must be made to help the industry.
I join in the congratulations offered to the sponsor and promoters, because the Bill will help the racing industry. The fundamental problem is that it needs more money. If one visits British racecourses and notices the condition of some of them, especially the smaller ones, it is as plain as a pikestaff that, unless there is an injection of capital, racecourses will deteriorate further. Unless there are financial incentives for people to take a greater interest in racing, the industry's future is not good.
Much has been said about trainers. The cost of training racehorses has now become so exorbitantly high that few people can afford it. Therefore, if trainers require the facilities that the Bill provides, those provisions should be approved.
I understand the points that have been made on behalf of hacking riders. They have been vastly exaggerated. Some poor points have been made on their behalf. I am all in favour of hack riders, and horses, and strongly favour anything that helps riders, horses or the industry. Some ridiculous arguments have been made on behalf of the Epsom Riders Protection Association. I can only assume that the hon. Members who made them have done so with their tongues in their cheeks. No doubt the Committee will consider the arguments in detail at the appropriate time.
Nobody wants to obstruct the Bill. It makes an important contribution to British horse racing. However, I am appalled by the timing. Tonight we had a debate on


regional unemployment which could last only three hours. We have spent almost two hours discussing this Bill which, important though it is, cannot be compared with the problems of unemployment. Perhaps we have taken up too much time discussing the Bill's detailed provisions.
I commend the Bill to the House. I hope that the petitioners and objectors, on further reflection, will agree that reasonable objections can be met in due course so that they need not be pressed now. It is important that the House should be seen to support the racing industry. The Bill provides a means of support and I commend it.

Mr. Harry Greenway: I do not oppose the interests of race horse owners or anybody else connected with them. The House will know of my strong support for racing. I thank my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) for explaining how trespass may be dealt with in the Bill and for his new suggestion that it could be covered by the imposition of heavy fines. Perhaps we can consider that, even at this late stage.
The right hon. Member for Birmingham, Small Heath (Mr. Howell) spoke eloquently from the Opposition Front Bench. He said that 20m is a sufficiently wide space for a group of hack riders or a single hack rider to manage. The problem might be more difficult if the 20m strip goes across a golf course or other awkward area, although I concede that there may be a case for telescoping a strip for short spaces.
I am a fully qualified riding instructor and for many years I have taught children and adults to ride. I know that one must be careful when going from a wide ride to a narrow ride because it can lead to problems. We must remember that horses are not machines. They are not motor cycles. They can suddenly do the unpredictable. They can take off and gallop away from a ride, whether it is 20m or 50m, for no reason. I have such incidents in mind when I consider how trespass is dealt with in the Bill.
I have a life-long interest in horses and riders, but I have always been most interested in the disabled child or the underdog who has no chance to ride because of his birthright. I refer to children in inner London schools and deprived children. I am most interested in protecting their rights. In doing that, one cannot allow the rights of ordinary hack riders to be eroded because the two are interdependent. I have taken children from deprived areas or homes to ride on the downs. That has brought them new insights into life and undreamt of happiness. Access to the downs and to the countryside is of the greatest importance to those individuals.
I declare two interests. I occasionally ride race horses and enjoy it, be it on the flat or over hurdles or fences. I am light enough to do that. Within the past three years I have raised about £6,000 for charity having ridden twice the length of Exmoor—30 miles—on quite a difficult horse and survived.
My second interest is that I am an unpaid nationally elected member of the council of the British Horse Society. I know exactly what has transpired in council meetings on this issue. There has been no council meeting since that at which the council stated that it would oppose the Bill in its present form unless the clauses making trespass on the downs a criminal offence were removed in

favour of byelaws dealing with trespass. I want to be certain before I leave the Chamber that that will be faithfully done, as I am in some doubt about that following the behaviour of the promoters.
The access point is of the greatest importance. People living in cities need access to the countryside and they must have it. This is what national parks are all about. In my view, people living within an area containing a facility such as Epsom and Walton downs have a natural right of access to it. The determination of people to limit access or, as when this Bill was first produced, to deny it altogether must be considered carefully.
Reference has been made to heavy pressure having been brought to bear in connection with the Bill. A certain amount of pressure has been put upon me not to oppose the Bill, and I do not oppose it in its broad principles. I am unhappy about some of the pressure to which I have been subjected, and I shall deal with that later. I regret that the public is losing access to 80 per cent. of the downs, but I accept that.
I want to read a letter that I received from the Epsom Riders Protection Association. That body has been referred to many times. I shall read not one of its general letters but one addressed specifically to me. Before the Bill came up for Second Reading on the first occasion I told the promoters that if they persisted in including clauses that made trespass a criminal offence, I would oppose the Bill. They replied that they were willing to remove all clauses that regarded trespass as a criminal offence and to deal with the matter under byelaws. That was late on the day that the Bill was to be read a Second time.
Although the Bill had been in prospect many months—this is what I mean by heavy pressure—the promoters did not appear here until the eleventh hour. Having received their assurance, I went to the Private Bill Office and asked "What value is the assurance of the promoters when they promise that they will redraw the Bill and recommend to the Committee considering it that trespass will not be dealt with under any clause as a criminal offence but will be dealt with under byelaws?" The Clerks to the House advised me that it would be more than it would be worth to go back on that assurance. Professionally, it would not be done in any circumstances. With that assurance, I returned to those gentlemen and said "I shall withdraw my opposition and support your Bill because you have given me your word. That is good enough."
I was therefore surprised to receive from the Epsom Riders Protection Association a letter dated 14 January which stated:
Dear Mr. Greenway,
Epsom Downs Bill.
Yesterday I received from the Promoters' agents a copy of the proposed redrafting relating to your objection to the criminal offence provision in the Bill. We have today met the Promoters and voiced our concern that although subsection (3) of Clause 15 has been deleted and is now dealt with under the byelaw provisions for Clause 11, there still remains a criminal offence provision in Clause 15 for contravention of subsection (4)(a). This criminal offence is now drafted in subsection (5). It is our contention that this should not be a criminal offence and should be dealt with under byelaw provisions of Clause 11. The Promoters did not give the impression of being prepared to re-draft this at the meeting this morning and as we consider it to be equally as onerous as the offence previously under subsection (3) now deleted perhaps you would be prepared to support us again in this?
Yours sincerely,
T. Staplehurst.
In all equity, I give Mr. Staplehurst and his friends my support. I feel that I may have been seriously let down. I


hope that the Minister, with whom I had a 30-second conversation before the debate, will be able to reassure me. If not, I shall oppose the Bill.

Mr. Ryman: The hon. Gentleman is obviously troubled about whether the sanction should be by way of the creation of a criminal offence or by breach of a byelaw. Is not he making a lot of fuss about nothing? Surely the procedure for enforcing the sanction is exactly the same, in that the person offending will appear at a magistrates court, and if convicted will be fined.

Mr. Greenway: I take the hon. Gentleman's point. I am not a lawyer, but I am voicing an objection made by people who have taken legal advice. I am doing so honourably and honestly. Whether this will make any difference in the end is not essential to the point. If that is so, why do the promoters appear to have gone back on their word?
The promoters appear to have gone back on their word, but I hope that that is not so. As I came into the Chamber just after the debate started, I received a letter from the town clerk and chief executive of Epsom and Ewell objecting to a letter from me in which I pointed out what the Private Bill Office had said about being assured that the promoters would not go back on their word. I said I hoped that that was the case. This letter has come on top of all sorts of other pressures. For example, there was a meeting on the day that the Bill was due for Second Reading, and that only a few minutes before the measure was due to come before the House. A letter was placed in my hand as I walked into the Chamber. I am not happy about that. The Epsom Riders Protection Association may have reason to feel exasperated at the way in which it has been dealt with.
I have made my point strongly and firmly. I shall be happy to take back all that I have said if the Minister can assure me that the promoters do not intend to make trespass a criminal offence and that this will be dealt with under byelaws, even though the technical point made by the hon. Member for Blyth (Mr. Ryman) may be perfectly valid. That is what I and the British Horse Society council asked for. We said that we would settle for no less, and that remains our position.

Mr. John Golding: The hon. Member for Ealing, North (Mr. Greenway) said that horses are not machines or motor cycles. The horses that I back and the cars that I drive have one thing in common: they suddenly stop before they get to their destinations. I support horse riders too, but I principally support those who ride race horses. The debate has polarised between riders of race horses and other horse riders, but that is not the issue. It is between those who ride and train and obtain their employment through race horses and those who are hacking. Possibly the hon. Member for Ealing, North is used to supporting hacks. We see many before us tonight, but I strongly support the Bill because it supports horse racing.
Having said that, I would feel as sore as the hon. Member for Ealing, North if I were to be twisted in the way that he seems to believe that he has been. I cannot understand why, a few weeks ago, the promoters did not agree to a byelaws compromise.
In the minds of ordinary people there is a difference between being brought before the beaks on a charge of

breach of a byelaw or a breach of a statute. To lawyers that may seem nonsense, but the distinction appears to matter to the people concerned. They would prefer to be dealt with under the byelaws. When I asked at another meeting why the promoters would not make a concession to avoid much kerfuffle in the House, I was told that it was because the Home Office might make difficulties about making the byelaws. If the Home Office will not make the byelaws, what right has the Minister to commend the legislation to the House?
I understand that the Home Office is sensitive because of byelaws that were made—which got a friend of mine in Birmingham into much trouble—about the control of dogs in parks. I understand that, but is the Home Office prepared to make the necessary byelaws? If the answer is "No", what value has the Minister's support? If the answer is "Yes", why do the promoters not compromise?
In opposing the hacks and supporting the race horses, I support the Bill, but I shall also support amendments that will provide a satisfactory solution for those who wish to be charged under the byelaws rather than statutes.

Mr. K. Harvey Proctor: I had not intended to speak and I shall be brief in supporting my hon. Friend the Member for Ealing, North (Mr. Greenway) and some of my constituents who have raised points similar to those expressed by him.
I should feel uneasy about supporting the Bill if contravention of the rules contained in it were to be made a criminal offence. Would my hon. Friend the Member for Devizes (Mr. Morrison) reassure me about the provision in clause 15(5) about a horse that might bolt? Will he consider the defence of reasonable excuse to have been triggered in the case of a horse bolting in such circumstances? With that brief comment, I look forward to hearing my hon. Friend's reply.

9 pm

Mr. Charles Morrison: With the leave of the House, I shall say a few words in an attempt to sum up this interesting debate that has drawn to it several experts on racing and others, such as the hon. Member for Stockport, North (Mr. Bennett), who have attempted constantly to look after the interests of ramblers and riders.
I am especially grateful for the wholehearted and unequivocal support of my hon. Friend the Minister with responsibility for sport, whose intervention was, as always, wise and helpful. I was also grateful for the support of the right hon. Member for Birmingham, Small Heath (Mr. Howell) whose knowledge of sport is paralleled only by that of my hon. Friend the Under-Secretary of State. I was grateful for the full-blooded support of the hon. Member for Isle of Ely (Mr. Freud) and my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies), whose compliments on the drafting of the Bill are much appreciated. I was also grateful to the hon. Member for Blyth (Mr. Ryman), who drew attention to the parlous state of racing.
The problems raised by several hon. Members in their constructive and helpful speeches stem from the fact that Epsom and Walton downs have been subject for many years to multiple use. As my hon. Friend the Member for Reigate (Mr. Gardiner) said, there is bound to be some conflict between the users. The users include not only racegoers and race horse trainers but many riders, walkers,


golfers and model aeroplane fliers. There must be a compromise between the demands of the users, who must operate a policy of give and take.
I have referred to the support of the hon. Member for Isle of Ely. His support for racing was a little too wholehearted, because he gave the impression, perhaps inadvertently, that there were no interests besides racing. However, that is not so. The Bill is before us today because there are other users of the downs. The need for compromise was emphasised by my hon. Friend the Member for Reigate, who said that from time to time there had been dangerous incidents. However, the fact that he said that shows that there is a need for a Bill to regulate the use of the area.
The hon. Member for Stockport, North asked why the 1936 Act could not be reconstituted by means of an enabling Bill. There is a simple answer to the hon. Gentleman's question. The original intention of the promoters was to introduce an enabling Bill, as the hon. Gentleman suggested. However, further inquiry and consideration revealed two points. First, a number of the provisions of the 1936 Act had become outdated, and so it would not have been good enough to introduce an enabling Bill based on that Act. Secondly, a new Bill was needed specifically to try to meet the requests of those who ride across the downs, the hack riders whose interests had not been adequately safeguarded in the 1936 Act.
The hon. Member for Stockport, North also referred to the legitimate rights of riders and others. That may have been a perfectly reasonable point, but unless there is new legislation before the 1936 Act runs out there will be no legitimate rights. That important point must not be forgotten in the general consideration of the Bill.
I was glad to note that my hon. Friend the Member for Reigate referred with pleasure to the provisions of clause 16. The information I have been able to gain leaves me in no doubt whatever that caravans have in certain respects become an increasing nuisance. The caravans appearing on the downs nowadays bear no relation to the old-fashioned gipsy caravans that appeared in the paintings of Sir Alfred Munnings and were vehicles of great charm. Sadly those days have gone. The modern caravan is more often than not a rather scruffy mobile home.
The right hon. Member for Small Heath drew attention, among other things, to the needs of golfers. I have ascertained that, by chance, there was a complaint by the golfers only this morning—there has not been time to establish whether it was justified—about riders inadvertently straying on to golfing ground. That shows that there is an occasional problem about the need to maintain an area for use by golfers.
I was glad that the right hon. Gentleman made two other points. First, he drew attention to the fact that Mr. Wootton had made a generous lease in respect of the use of Walton downs. A host of people must be very grateful to Mr. Wotton for that. The right hon. Gentleman also referred to the inadequate facilities on Epsom racecourse on major racing days. I have no doubt that he is right in saying that if the Bill becomes law it will benefit racegoers who wish to enjoy the Derby and other race meetings.
My hon. Friend the Member for Ealing, North (Mr. Greenway) raised an important point which was also referred to by my hon. Friend the Member for Basildon (Mr. Proctor). My hon. Friend the Member for Ealing,

North is better known than anyone in the House for his strong support for riding and riders. I felt particular sympathy with him when he said that horses are not motor cycles. He and I have had considerable experience in that regard, often ending in pain and other tribulation.
My hon. Friend was particularly concerned with the possibility of hack riders finding themselves in a position in which they could be guilty of a criminal offence. Indeed, that could happen under the Bill as drafted. He said—so did the British Horse Society—that he would prefer breaches of the legislation to be dealt with by means of byelaws, and that the promoters have not given an undertaking to introduce an amendment. There is some misunderstanding, because there is a distinction—it was certainly in the minds of the promoters, if not in the mind of my hon. Friend—between the criminal offence, referred to in clause 15(3), of a rider riding where he or she should not ride, and the criminal offence, under clause 15(5), which arises where land is temporarily taken out of use so that it might be rehabilitated in its own interests and in the widest possible interests of riders and other users of the downs. There has clearly been some misunderstanding between my hon. Friend and the promoters on those two points.
I was informed of the misunderstanding earlier today, and the promoters have only recently been made aware of it. I have had the opportunity of a brief discussion with them on the subject and they have undertaken to look at it very carefully. Clearly they wish to be as sympathetic as possible, as they have always tried to be when points have been raised on the provisions of the Bill.

Mr. Andrew F. Bennett: As I understand the position, the promoters are now saying that if somebody strays from the areas in which he is supposed to be and goes on to areas on which he has known over the years that he should not go, he may be prosecuted under the byelaws. But if, inadvertently, he goes over an area which is being reseeded, that will be a criminal offence. Surely, if we get nothing else out of the debate, we should have an assurance that the two offences will both be treated under the byelaws. That would be a simple undertaking to give.

Mr. Morrison: The hon. Gentleman is not quite accurate. He said first what the promoters are now saying, as he understands the position. He intervened before I had finished what I was saying. I was going on to say that the promoters wish to look at the point with great sympathy but that, not having had the chance to have proper consultation about it, they prefer not to be dogmatic in any concession tonight. However, I have no doubt that they will make a concession. I certainly hope so, because I take the hon. Gentleman's point about the apparent rather artificial distinction between two different offences. I hope that my hon. Friend will take that as a reasonable assurance. The matter will be considered as soon as possible.

Mr. Greenway: My hon. Friend will correct me if I am wrong, but the promoters find it rather difficult to have to face suggested changes under pressure of time and yet they are lawyers, but those same people expected me to be able to reconsider several redrafted clauses, although I am not a lawyer, less than an hour before the Bill was originally due for its Second Reading. So I have little sympathy for them and I do not quite know who they think they are. I take it that I have the support of my hon. Friend


and the great sympathy of the promoters. However, that is not enough. They should give a categoric assurance, quite frankly through my hon. Friend, because that is what I consider they gave me when I first considered their suggestion for meeting my point under pressure of time. There is only one of me but about six of them.

Mr. Morrison: I have gone no further than a Minister speaking from the Front Bench normally would when asked to make a concession on the Second Reading of a Bill. If a Minister had a question fired at him during the debate or if he were requested earlier in the same day to make a change in the Bill, it would be unlikely if, in summing up that same evening, he would be prepared to be totally categoric in accepting the point. My hon. Friend can take it that it is as good as certain that a concession will be made, but I cannot in all honesty be absolutely categoric and dogmatic because I am not a promoter of the Bill.

Mr. Greenway: I am grateful to my hon. Friend, who is a personal friend as well as an hon. Friend. I take that as a strong assurance and it helps me to overcome what I felt was earlier dishonoured by the promoters and not by him.

Mr. Golding: Will the hon. Member for Devizes (Mr. Morrison) make it clear to the promoters that the Bill is at risk if they do not support the hon. Member for Ealing, North (Mr. Greenway)? It would be nonsense for such a good Bill to be at risk because there is a question of an undertaking not being honoured.

Mr. Morrison: The hon. Member for Newcastle-under-Lyme (Mr. Golding) has almost taken the words out of my mouth. There will be no question of twisting arms, but he can rely on me that if any arms have to be twisted they will be. I am sure that the promoters will have been even more impressed by having heard the strength of the views expressed by my hon. Friend the Member for Ealing, North and the hon. Gentleman about clause 15 and criminal offences.
I conclude by thanking hon. Members for their interesting and constructive comments on the Bill. As I said earlier, the promoters have clearly demonstrated that they are ready and prepared to make necessary concessions, but it must be accepted in the ultimate that a compromise will not be an ideal for everyone who makes use of an area subject to multiple use. I emphasise again that there will have to be give and take, but I have no doubt that any outstanding problems will be ironed out in Committee. Therefore, I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time and committed.

Airey Houses (Repair Grants)

The Under-Secretary of State for the Environment (Sir George Young): I beg to move,
That the draft Grants by Local Authorities (Appropriate Percentage and Exchequer Contribution) (Repairs Grants for Airey Houses) Order 1982, which was laid before this House on 8th December, be approved.
On 7 September my hon. Friend the Minister for Housing and Construction announced that the Government were proposing to make financial assistance available to private owners of Airey houses. Airey houses are a type of prefabricated house designed by William Airey and Sons (Leeds) Limited and built in the 1940s and 1950s for local authorities and other public bodies. Recently, many have been found to have serious defects. It is estimated that about 2,000 of this type of house are now in private ownership, all in England and Wales.
In the exceptional circumstances of the case, the Government consider that they should assist owners who bought their houses at prices that can now be seen to have been based on a substantial overvaluation.
Under the scheme announced by my hon. Friend, a private owner who has bought an Airey house at a "defect-free" price will have the option of following two courses. He will either be able to apply to his local authority for a repairs grant towards the cost of remedial work or, in cases where the owner did not wish to undertake repairs or where repairs were not practicable or cost-effective, he would have the option of seeking the purchase of his home by the local authority or Government Department that originally owned it. It is for the individual owner to decide whether he wishes to take advantage of the scheme and, if so, which of the two options he wishes to exercise. The order concerns the first option, that of repair.
To enable local authorities to make grants to owners of Airey houses for the repair of their homes three statutory instruments are required. Two are subject to the negative resolution procedure and were laid before the House on 17 January. They set the limit on the expense that will be eligible for grant aid—the eligible expense limit—at £14,000 in Greater London and £10,500 elsewhere. They also seek to ensure that no owner of an Airey house is ineligible for a grant because the rateable value of his house is too high by enabling authorities to give grants on any house outside London that has a rateable value of less than £275. The rateable value limit would otherwise be £225. In London the rateable value limit remains unchanged at £400.
The order concerns the rate at which a grant may be given by an authority and the proportion of the costs of that grant that will be met by the Exchequer. The order provides that authorities may make a grant up to a sum equal to 90 per cent. of the eligible expense limit. It also provides that in those exceptional circumstances the Exchequer contribution will be 100 per cent. Local authorities will be reimbursed in full by the Exchequer for the grants that they make to Airey house owners.
Local authorities will not be legally obliged to grant applications, but I hope that the knowledge that there will be full reimbursement will encourage them to treat all applications for grant sympathetically.
The arrangements for repurchase are being dealt with administratively. They will be set out fully in a circular


which we shall issue shortly to all local authorities. The circular will also explain to authorities the arrangements approved by the House for repairs grants.

Mr. Joseph Dean: Will the Under-Secretary tell us, so that I do not have to raise the issue in my own speech, whether repurchase will be optional or compulsory?

Sir George Young: All the arrangements that I have outlined are optional, but we hope that as 100 per cent. compensation from the Exchequer will be available to local authorities they will exercise the discretion allowed to them under the order.

Mr. John Evans: The Under-Secretary has made one or two important announcements, including the fact that all the arrangements are optional. Local authorities may exercise their option and pay grants to people who have purchased Airey houses, but, because of the Department's intransigence, local authorities have to refuse grants to those who have purchased Parkinson houses and are in exactly the same position as the owners of Airey houses.

Sir George Young: The hon. Gentleman seeks to extend the order to other types of property. I understand his argument. As my hon. Friend explained in the statement on 7 September, the circumstances surrounding the Airey houses are unique, and the buildings to which the hon. Gentleman is referring, which are Parkinson houses, are in no way comparable. I wrote to the hon. Member recently and set out the reasons why Parkinson houses are not comparable to Airey houses. That is why the order does not extend to them. No doubt, Mr. Deputy Speaker, if the hon. Member catches your eye he will seek to develop his arguments further.
I referred to the circular that we shall issue shortly to local authorities. This is at present with the local authority associations and the Building Societies Association for comments. I take this opportunity to thank the association and individual local authorities for their help and co-operation so far in this scheme. If we can achieve the same degree of co-operation in its execution, we shall succeed in giving real help to Airey house owners who through no fault of their own would otherwise face a bleak future. I commend the order to the House.

Mrs. Ann Taylor: The Minister has spoken briefly about the order, which the Opposition shall not be opposing. It is an initiative from the Government that we welcome. This is an unusual day, one of those rare occasions on which a Minister accepts his moral obligation, in this case to some people with housing problems. The Opposition think that it is right that the Government should accept responsibility for the defects that have been found in this type of system-built housing that was approved by Governments, and which local authorities were encouraged to adopt. We have no disagreement with the Government.
The regulations and the circular that goes with them give the unfortunate owners of Airey houses the opportunities, which the Minister has outlined, to receive a 90 per cent. repair grant, or to sell their homes back to the local authority or other public bodies. I hope that the

Minister will go on to deal with other public bodies, such as the National Coal Board, that have sold Airey houses to sitting tenants. Their position is unclear from the statutory instrument, and from what the Minister has said.
Airey homes have been popular. On the whole they have given good service to the tenant and have lasted for about 30 years. We have these problems that we are discussing because the expected lifespan of Airey properties was about 60 years and, as the properties were relatively inexpensive to build, they were popular with local authorities as well as with tenants. Most people expected the properties to last for 60 years, and it was on this basis that several thousand of the 26,000 Airey home dwellers decided to buy. Many of the purchases took place in the 1970s on a voluntary basis, when local authorities were willing to sell to sitting tenants. There was then another wave of sales under the right-to-buy legislation.
The fire hazards and the structural weaknesses of the concrete columns were discovered. I should mention here my hon. Friend the Member for Penistone (Mr. McKay) who, when he was chairman of the building department of Barnsley council, instructed the first dismantling of an Airey house for examination. It was his work of examination that led to the full revelation of the scale of the problem.
The order is not simply about Airey houses. It is about a small minority of Airey houses, those that have been sold to private buyers. Many may be touched by the Government's concern for the unfortunate owners who found that they had bought a pig in a poke and were left with an unsaleable or potentially unsafe property. The Government's generosity to these unfortunate people is unprecedented. The repair grants of 90 per cent. will cover repairs, redecoration and even the cost of survey fees. If repairs have already been carried out at the owner's expense, ex gratia payments will be made.
If the owner-occupier decides to wash his hands of the affair and resell to the local authority, he gets 90 per cent. of the difference between current market value and the defect-free value as an ex gratia payment from the Government. Even legal and survey fees will be covered. The Government will shoulder the burden of responsibility by reimbursing the local authority 100 per cent. of the cost of the repair grant and by assuming the cost of the ex gratia payment to bridge the gap between current market value and defect-free value on resale.
So what is the problem about this statutory instrument? What is the fly in the ointment? Despite the generous compensation to unfortunate owner-occupiers, there is no compensation for the unfortunate owner if it is a local authority. Here we have one rule for some owners and another rule for others. I do not think that the Minister has considered the position of the owner-occupier's neighbour who has not bought his house from the local authority. He cannot get a repairs grant. The circular to which the Minister referred says that the repairs in those circumstances are the clear responsibility of the local authority, as landlord, to carry out and that an Exchequer contribution will not be made in respect of such grants. What we have not heard from the Minister is why this problem is the responsibility of the Government if the house is privately owned but not if it is occupied by a tenant. Why do we have these two sets of rules?
I wonder whether the Minister realises the full impact of this problem for local authorities. If he does not, I am sure that some of my hon. Friends will enlighten him from


their own experience. If the hon. Gentleman recognises the problems of local authorities, why has not he helped them? Why is there no help for them in the order?
The cost of repairing these properties, according to the Government's estimate, is more than £10,000 each. Many other estimates put the figure much higher if a proper job is to be done. The cost to some local authorities is tremendous. I know that my hon. Friend the Member for Leeds, West (Mr. Dean) will want to develop this, but Leeds, for example, has 2,250 Airey houses. It faces a bill of £22·5 million to put all those properties in good order. In Doncaster, with nearly 900 houses, the bill is estimated to be more than £14 million. My right hon. Friend the Member for Bristol, South (Mr. Cocks) has been campaigning for help. Bristol, with 330 houses, will have to spend about £3·5 million just to put right some of the defects of Airey properties.
The Government's circular says blandly that expenditure by local authorities in repairing Airey homes in their ownership will be eligible for housing subsidy in the normal way. They say that as though that is of great help to local authorities. Although it may be of some help to some authorities that are still in receipt of subsidy, the vast majority, including Leeds and Doncaster, will see this as a hollow statement because the majority of housing authorities no longer receive any subsidy from the Government. They will have to meet the bill themselves.
Local authorities such as Leeds, Doncaster and all the others with many Airey properties will have to look to their long suffering tenants or to their ratepayers to foot the bill. This is on top of all the rent increases that this Government have already forced on tenants. In Doncaster, for example, it has been calculated that if Airey houses are to be repaired rents will have to go up by £1·16 per week in addition to all the other increases that have already been imposed.
The uncertain future and the daunting repair costs of Airey houses are causing worry and distress to everyone, but why do the Government feel that the worry and distress of the owner-occupiers are a matter about which they should be concerned, while the equal worry and distress of local authority tenants can be glossed over? In many areas, Airey houses are becoming unlettable. Again I take Doncaster as an example, where many of the Airey houses have to be boarded up when they become vacant because no tenant is willing to take the risk of moving in. That, of course, means an increasing loss of rents to the local authority—another pressure on local authorities that they can well do without at present.
The Government are leaving local authorities very much to their own devices when it comes to repairs. Although the Minister referred in his statement of 7 September to the unique circumstances of Airey houses, he is doing nothing special to assist local authorities to deal with the problem. Although repairs will be eligible for subsidy, where subsidy is still given, Airey houses will have to compete with all the other local authority needs for their share of investment in housing, and that means competing for limited resources.
On the repurchase option, which the Minister is anxious should be offered to the buyers of Airey houses, the Government, although generous to the owner-occupier, are far from generous to the local authority. The local authority has to fund the purchase at current market values. It gets no allowance for its survey or its legal or administrative costs, and when the repurchase is complete

it will be faced with a repair bill of upwards of £10,000. Once the house is in good order, the local authority may have to sell the property again to the tenant, and at a massive discount.

Mr. Joseph Dean: I was interested to hear my hon. Friend's last few words. Is it not true that within the space of five years a person could qualify for two maximum discounts on the purchase of a council house?

Mrs. Taylor: My hon. Friend is right. It is certainly possible for a tenant to qualify for two amounts of discount. Where an Airey house was sold on a voluntary basis by the local authority and then repurchased under the regulations and the circular that the Minister has now produced, the tenant could, in a short period, exercise his right to buy under the 1980 Act, and get a further discount on the same property.

Sir George Young: Will the hon. Lady recognise that in those circumstances the cost floor provisions might well bite, and that that would insulate the local authority against a subsequent loss?

Mrs. Taylor: It might—as the Minister says, it might—insulate the local authority against a subsequent loss, but he should remember that we are talking about properties that are quite old, and that therefore the cost floor does not really apply when we are talking about current market values. I doubt whether that cost floor would give protection to most local authorities in the case of properties that are the best part of 30 years old.
I have tried to calculate some of the costs to the local authorities. With houses originally purchased in the early 1970s, the tenant may get a cash gain of up to £10,000 because of the possibility of the tenant getting a discount twice and the local authority having to pick up the bill for the overall repairs, which the Minister is seeking to persuade local authorities to pay.
In fact, I do not believe that there will be any great rush to buy refurbished Airey houses. The scare that has taken place means that many people have lost confidence in Airey properties, and I therefore do not imagine that Airey houses will have a large resale value. It is virtually impossible to get a building society mortgage on such property, and, even if the proposed certificate of repair that the Minister is considering were introduced, I am sure that building societies would not want to consider the purchase of Airey properties. That is one problem that the Minister has so far failed to deal with.
The Opposition could not, and would not, want to object to what the order does. We acknowledge that Airey houses present special problems. They are not, however, as the Minister claimed, unique. There are other types of system-built houses that have problems. There are the Caspan houses in Leeds, and many others. My hon. Friend the Member for Newton (Mr. Evans) has raised another example of system-built housing that creates many problems for local authorities and for the those who have purchased their own homes.
The question that remain unanswered is why the Minister is helping these few people. Why should he choose those who have purchased Airey houses for this help? I suspect that the reason probably lies in the Government's determination to prop up their council house sales policy, at the expense of all else, to allay the fears of those whom the Government want to push towards


exercising the right to buy. So long as people who have bought their own council houses are faced with bills of this magnitude others may be deterred from exercising their right to buy. That would be completely against all that the Government want.
The Opposition believe that the order displays the Government's dual standard—one set of rules for owner-occupiers and another for tenants. While we approve of the order, we cannot but condemn the duplicity that lies behind it.

Mr. John Heddle: Unlike the hon. Member for Bolton, West (Mrs. Taylor), who welcomed the order grudgingly, I welcome it enthusiastically. I congratulate my hon. Friend the Minister for Housing and Construction on his statement on 7 September last year and my hon. Friend the Under-Secretary of State on the announcement that he has made tonight.
Like the hon. Member for Leeds, West (Mr. Dean), who has taken a close interest in these matters, I feel that I am qualified to speak in the debate because I raised the plight of the Airey house owner and tenant in an Adjournment debate on 25 June last year. I congratulate the Government on the swift, sympathetic and constructive action that they took in September and have taken again now.
The hon. Member for Bolton, West misled the House, probably inadvertently, when she suggested that the cost of repairing and bringing back into life and into active occupation these Airey houses would be about £10,000. I am sure that the hon. Member for Leeds, West agrees that there are a large number of construction companies in Yorkshire and elsewhere, certainly in Staffordshire, as I know, which have made a specific study of the inherent structural problems of Airey houses and have devised foolproof 25-year package proposals to enable these Airey houses to come back into useful life.
I ask the House to disregard the somewhat sensational figure of £10,000 to which the hon. Lady referred. To my knowledge, Taylor Woodrow Construction (Midlands) Ltd. will, in almost any circumstances, be prepared to carry out for local authorities, on a package basis, the revitalisation and regeneration of these properties for between £2,000 and £5,000.

Mr. Michael Welsh: Is the hon. Gentleman prepared to say which building society will provide a mortgage if these houses are put up for sale after the package is completed?

Mr. Heddle: I am grateful to the hon. Member for Don Valley (Mr. Welsh) for raising a matter to which I wish to refer. I ask him to bear with me for one or two moments.
In my Adjournment debate on 25 June I reminded the House of a document that was circulating during the time when these houses were constructed immediately in the post-war period. This document was given to me by my hon. Friend the Member for Folkestone and Hythe (Sir A. Costain), whose firm at the time was closely connected with the construction of these properties. I wish to remind the House of the quotations that I made from the document. It is pertinent to bear in mind that at the time one Government Department on one side of Whitehall

thought that Airey houses were of a permanent nature, while another Government Department on the other side of Whitehall, co-operating with the first Government Department, suggested that the houses, being of a prefabricated nature, had a temporary life.
I quote from a letter which Sir Edmund Airey, the chartered architect from Leeds who designed the properties, wrote to my hon. Friend the Member for Folkestone and Hythe. He said that the system
has been selected by the Government as the quickest and most effective means of providing additional new permanent houses to meet the urgent needs of rural areas.
Another document circulating in Whitehall at that time had this sentence:
The system complies with the recommended structural and physical standards laid down by the Inter-Departmental Committee on House Construction appointed by the Ministry of Works, and has been approved by the Ministry of Health for adoption by local authorities.
There are two schools of thought, and I hope that the Minister will be able to shed some light on one aspect, if not tonight, by subsequent correspondence. The document that I have just read states specifically that Airey houses were erected in accordance with the specifications and guidelines laid down by the then Ministry of Housing. It seems that there was no intention that the properties should have a limited life, although they were of necessity of prefabricated construction, and it was assumed that buildings known as prefabs, which were constructed after the war to fulfil a specific and urgent need, had a limited life.
I wish to direct the attention of the House to the philosophy and ethics of a local authority selling, under the right-to-buy provisions, properties built under some form of prefabricated specification some 20 or 30 years ago to fulfil a temporary need. A number of purchasers—former tenants of local authority-owned Airey houses—having bought their houses under the right-to-buy provisions of the Housing Act 1980, find themselves in a Catch 22 situation. Wishing to buy a permanent home for themselves, their heirs and assigns, they have found themselves buying a house of temporary and prefabricated construction with a limited life. The order underlines the Government's wisdom and common sense in underwriting the defects which were built into the properties, and which the purchasers could not have found out about, even by employing the most prudent and astute surveyor, because it is clear that the structural defects to which the order refers could not have been found.
I raised this matter in the Adjournment debate in June last year because I have about 172 Airey houses in my constituency. I should like the Minister to clarify the rateable value limit, to which I heard him refer. As I understand it, compensation or grant payable under the Housing Acts relates specifically to a rateable value limit of £225 outside the Greater London area. Will the Minister confirm that if an Airey house owner has improved and extended his property at his own expense subsequent to exercising his right to buy, he will still be able to obtain the repairs grant to which the order refers if the rateable value limit has exceeded the £225 ceiling?
Three matters have been raised in discussions with my local authority, the Lichfield district council. They concern the redevelopment potential of Airey houses in rural areas. In Colton, Hill Rideware and Alrewas in my constituency, and elsewhere, Airey houses are not concentrated, as are other forms of local authority


housing, in inner city and urban areas. I am sure that many hon. Members will confirm that. Several Airey house developments were carried out in groups of between two and 14 on the fringes of the most charming villages. Many provided—and still do—perfectly adequate accommodation for agricultural employees and for those employed in the rural community.
It would be wrong to suggest, as the hon. Member for Bolton, West did, that because one Airey house in 10 or 20 has a minor structural defect—the percentage has not been computed—they all have. Many are still sound in wind and limb and will continue not only to be sound, attractive properties, but mortgageable.
It is suggested that, while most sites can be developed on a one-for-one basis, some sites—I am talking now of rural sites—have scope for redevelopment to provide more dwellings. It is suggested that a site-by-site appraisal be undertaken. Not only the Association of District Councils, but the Building Societies Association would like to see that. Redevelopment potential, the land value, the housing need and the condition of the properties could be considered, and that in turn would result in specific financial implications for each location.
It is wrong for the House to be persuaded by Labour Members that all Airey houses are defective. That brings me to my last point, which was raised by the chief surveyor of the Bradford and Bingley building society in correspondence with me after my Adjournment debate and before my hon. Friend the Minister made his announcement on 7 September 1982. That correspondence refers to those who fall outside the order, those who have not yet bought their Airey house, but who, by qualification of years, are able to do so under the right-to-buy provisions of the Housing Act 1980.
The chief surveyor says:
If the Government were to undertake to put right all structural defects then the cost may well prove prohibitive"—
we do not know—
but the solution may be for the Government to foot the bill for the initial survey, which in many cases may prove that the house is not deteriorating and would put many people's minds at rest. Further, it would also mean that the occupiers had a document guaranteeing present structural stability, thereby allowing future sales to continue and give confidence to the building societies in respect of their Lending Policy.
That is why I told the hon. Member for Don Valley that the building society movement is prepared to give the majority of these properties a completely clean bill of health. I suggest that the obvious agency to provide the Government with that information is the district valuer's department of the Inland Revenue. Provided that the district valuer is prepared to give the properties a clean bill of health, the building societies will be prepared to put their money where the district valuer's mouth is and therefore allow many Airey home occupiers to rise to their lifetime's aspiration of home ownership under the right-to-buy provisions of the Housing Act 1980.

Mr. Joseph Dean: Some hon. Members, and certainly the Minister, will be aware that some time ago, possibly on 13 December in a debate on tenants' rights, I raised the broader issue of industrialised building and how it was fast gathering momentum that could become a deluge of adversity for the housing policy of the present Government and any future one.
Although I support the order, dealing with Airey houses alone is rather like dealing with one small rivulet of a

volcano that is about to explode. In the debate of 13 December I quoted £3 billion as being the sum necessary to put right the hundreds of thousands of industrial and semi-industrial houses that have been built in the public sector. That figure has never been denied or commented upon.
In that debate I asked why we deal with some people in the housing sector differently from others. I have always been led to believe that the Government should be evenhanded in their treatment of the community. I see no difference between a family that lives in an Airey house which it has purchased from the local authority and the family next door that rents a house from the local authority. For both families, the house is their home. It is disgraceful to say for political purposes that the owners of the house that has been purchased have priority and are socially and financially superior to the others.
My hon. Friend the Member for Bolton, West (Mrs. Taylor) quoted figures for Leeds. On 13 December I said:
The hon. Member for Lichfield and Tamworth (Mr. Heddle) had a first-class debate on Airey housing. That is another facet of industrial building that is deteriorating. People who have bought the houses will have to spend substantial sums—considerably more than they can afford—to remedy the construction defects.
The Minister gave these people certain guarantees, but hundreds of thousands of council tenants live in Airey houses that are deteriorating. The city of Leeds has over 2,000 Airey houses and it will cost approximately £20 million to remedy the defects. The Minister has made no promises about council houses. He has not told Leeds that he will underwrite a large proportion of the money needed to do these repairs.
Later in the debate I asked the Under-Secretary of State for the Environment whether he intended to answer some of the points that had been raised by my right hon. and hon. Friends. He appeared to be dwelling, as does the Minister in Committee on the Housing and Building Control Bill, on replies to his own Back Benchers. He said:
With regard to Airey houses in Leeds, the Government will take into account the costs that Leeds will have to bear to put it right when they come to calculate the HIP allocations of the years in which the expenditure will fall."—[Official Report, 13 December 1982, Vol. 34, c. 47ߝ64.]
In other words, he was saying "Well, lads, we may allow you some more as long as you pay yourself."
I am sorry that the Minister for Housing and Construction is not present. I do not mean that in any disrespectful way to the Under-Secretary of State. Hon. Members who serve on the Housing and Building Control Bill Committee will be aware that I raised the problem with him last Thursday. I said:
I had not intended to speak again but I shall take up that completely inadequate and extremely partisan response. I do not know what special persuasive powers the hon. Member for Lichfield and Tamworth (Mr. Heddle) has. It seems that the Minister's policy was determined by a bias towards his own Back Benchers. When he pays lip-service and tribute to the way that his Back Benchers represent their constituents, I assume that that could apply equally to every member of the Committee, although a political viewpoint divides us.
Some time ago the hon. Member for Lichfield and Tamworth had an Adjournment debate on what the Government had done about Airey houses. On Monday night, an order will go through giving substantial financial assistance to ex-council tenants who bought their own Airey house and who are now landed with a liability.
The Minister's reply was appalling. He said:
I make no criticism of him,"—
that is me—
but if the hon. Member had made representations to us about the considerable number of council tenants in Leeds who were


of the same nature as those mentioned in the representations that I have received from my hon. Friend … I should have been delighted to refer to them.
Obviously, the Minister had not read what happened in the housing debate in December. I have raised the issue on at least two occasions in the Chamber.
What I find even more frightening is that the Minister also said:
I am only sorry that the hon. Gentleman has not mentioned the fact that one of the major sources of difficulty for council tenants in Leeds is that the local authority has not issued the statutory right-to-buy application forms. That should be of grave concern to all hon. Members representing Leeds constituencies.—[Official Report, Standing Committee F; 20 January 1983, c. 398ߝ99.]
The only conclusion that people who have entered into contracts with local authorities as tenants of Airey houses can draw is that the Government have a vendetta against them. Their only hope of assistance, apart from another rapid escalation in rents, is to buy their houses. That is the policy of the party that advocates democracy. The only right that they are giving to Airey tenants is the right to occupy a house in poor repair. The Minister obviously does not read our debates and he draws a distinct line between people who rent their houses and owner-occupiers. Even-handed treatment is demanded by everyone, and people are entitled to it.
I learnt the technique of reading letters in the Chamber from the Minister of State, who always seems to have a large supply at hand from people who support his policies. I received an unsolicited letter this morning. It came from people on an estate in Leeds which is due for major repairs by the local authority because it is deteriorating. They do not live in Airey houses, but 15 families are faced with a bill which almost matches the £10,000 mentioned in the order. They will receive no assistance. They blame the local authority for selling the houses to them. I blame the Minister and the Government for making the local authority sell the houses.
I hope that the Minister will say that the door is not closed to discussions on aid for tenants or owner-occupiers of houses built by industrialised systems in the public sector, since the Government fully approved them. A responsibility lies with the Ministers involved, from whichever Government they come. I hope that sympathetic treatment will be extended to all in that difficulty.

Mr. Vivian Bendall: I congratulate the Secretary of State and the Under-Secretary on their press release issued on 7 September. It was welcomed by many extraordinarily worried people. However, I am far from happy about a number of matters. I join the chorus of concern in that I agree that local authorities could have a tremendous problem in some areas. London faces a particular problem, because many of the Airey houses were originally commissioned by the GLC. Those houses have now been passed to the local boroughs. The situation in London is different from elsewhere in the country.
I agree with the comments made in an Adjournment debate by my hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle), who said that a special local authority grant should be given in some shape or form in respect of Airey houses. I hope that the Minister in due course will give that further consideration.
My constituency and the London borough of Redbridge are fortunate in that the Airey houses that have been examined by local authority officers have been proved not to have defects. There is concern, and rightly so, among many private sector owners—this has also been mentioned by my hon. Friend the Member for Lichfield and Tamworth—about the problem of selling Airey property. They frequently cannot be sold because of the survey situation and the building society loan.
I am particularly perturbed—I have raised the matter in correspondence with the Secretary of State—about the question of repairs and surveys. It has already been stated, again by my hon. Friend the Member for Lichfield and Tamworth, that an ordinary survey and certainly a building society survey, let alone a full structural survey, would never have discovered the problems in the columns that occurred in the early type of construction. It is not only Airey houses that have these problems. Others have been mentioned. In my constituency, some Orlitt-built houses may well have similar problems.
The columns are an important factor when examining the Government's proposals and suggestions to alleviate the problem of the private owner. Any structural defect in an Airey house will not be discovered by an ordinary surveyor but will require a specialist surveyor, such as a structural engineer, who will have to make bore holes and use a boroscope to discover the conditions of the columns. That is the only way to guarantee that that property is sound.
It is not even as simple as that. The Minister has admitted on numerous occasions in correspondence to me that if a property is sound today it will not necessarily be sound in seven, 10, 12 or 15 years' time. It has been recommended that a check be taken at reasonable intervals to see that the columns are in a good structural condition. If that is the case, and this is important, I have been unable to get an assurance from the Minister that the cost of the survey will be borne by the Government through their agents, the local authorities, unless it is proved that there are defects and that structural work is needed.
We are not talking about £50, £80 or £100 but of figures well in excess of £100. Even if associations form together to get one company to look at a given number of properties, the cost will be between £150 to £200 for each property. If that is the case, that owner must pay that £200. If work needs to be carried out and if defects are discovered, he can receive payment for the cost of the structural examination. If no defects are found, I understand that the owner will have to bear the cost. That might enable him to dispose of the property. On the other hand, it may not be easy to dispose of it because a number of people may be highly suspicious. As a result, another structural survey or examination may have to be carried out at some future time, and if no defects are found the cost will again be borne by the individual.
It would alleviate much of the problem if the Government took on board the cost of the full structure defects survey. That would give confidence to those who wish to purchase their properties and it would alleviate the building society problem faced by those wishing to dispose of their property.
What about repurchase by the local authority? According to the Minister, the onus is not on the local authority to purchase if it desires not to do so. What will happen if a local authority decides not to carry out the


repairs on behalf of the Government? Will the owner have any redress by way of appeal, or will that person suffer simply because he lives in that local authority area?
What will happen if defects are discovered in a second major survey? Will the Secretary of State and his Department review the amount of grant available to those who have purchased Airey houses and take inflation and rising costs into account?
If local authorities repurchase, will they pay the full market value or pay less than the price at which the owner originally purchased? If the owner wishes to purchase another local authority property, will he receive any discount that he originally enjoyed?
These are all ambiguous areas. I shall not detain the House because I know that other hon. Members wish to speak. I make these points because they are giving concern to my constituents and my local authority. I am in correspondence with the Minister and I shall continue to remain in correspondence with him, at least until all these questions are fully and adequately answered.

Mr. Allen McKay: My hon. Friend the Member for Bolton, West (Mrs. Taylor) welcomed the order and did not do so in a grudging fashion. I am sure that all hon. Members welcome it, because it is generous. Indeed, it is so generous that it makes one suspicious. It means that we must look at it carefully, because it is unknown for the Government to be so generous. The Government are blatantly treating the owner-occupier differently from the local authority. I have no axe to grind in relation to the owner-occupier, because the order is generous, and rightly so.
I take the point made by the hon. Member for Lichfield and Tamworth (Mr. Heddle) about a package deal. The matter first came to light because of a fatality in my constituency. I was chairman of the local authority committee concerned. It was an Airey-type house that caught fire. Such houses do not catch fire more quickly than other old houses, but the terrific speed at which the fire spread left us in no doubt that an investigation should take place. The house was completely gutted within five minutes and a little girl lost her life.
We decided to carry out an inspection and use preventive means in all Airey houses by the installation of rock wool in the cavities, plaster boarding the walls and ceilings, building up the party walls and insulating the roof. A sum of £400,000 was set aside for those purposes to be spent over two years.
It soon became apparent that some of the concrete posts had cracks of varying lengths, mainly at the base of the posts. We decided to alter the contract and to replace the posts that had cracks of more than 200 mm. It became apparent also that the problem was far greater and more widespread than we had thought. Therefore, a full analysis of the problem had to be undertaken. We drew the contractor into the investigation. All of the Airey houses were inspected, either by taking away the skirting boards or by using a boroscope, under the supervision of our own structural engineer. He agreed that 110 dwellings were so damaged that they were critical and should be demolished. Fifty-six category B dwellings had damaged posts and could not be guaranteed for more than five or six years. A further 64 dwellings had little damage and could be proofed.
To make sure that the structural engineer and our architects were correct, the Building Research Establishment was commmissioned to provide a second opinion. It confirmed our worst fears that the repair and replacement of individual posts was possible, but that if three damaged posts were positioned together or in a critical position, the structure must be considered unsafe. There could be no guarantee whatever that the other Airey houses would not fail in a similar way in the near future. A re-inspection had to be undertaken every two years.
We examined the options, taking into account the capital and revenue costs over 10 years, the social impact of the options in each village and the physical effects of each option. Public meetings were held in every village with Airey houses and the necessity of the houses being pulled down was put to the people concerned. We decided not to replace three-bedroom houses with three-bedroom houses, but to take into consideration the size of the family in each house. If there were only two in a family, we suggested a two-bedroom house.
We said to the people concerned that repairs and improvements to modern standards would cost £3,807,000 and that the revenue per annum would be over £492,000. The capital cost of demolition would be £398,550 and revenue per annum would be £123,500. Demolition and rebuilding by the local authority would have a capital cost of more than £5 million and the revenue per annum would be more than £600,000. We decided to plump for demolition and replacement by local authority housing associations from private builders, but that capital cost was estimated at £2,979,000, with an annual revenue of £365,000. That is where the difference arises, because the local authority will not be reimbursed for those costs.
The houses are usually in pairs. A house bought from the local authority may be one half but the other half may be a local authority house that must be demolished. The owner of the private half must decide whether to sell. Sometimes owner-occupiers overestimate the value of the house and underestimate the cost of the repairs needed. They forget that the local authority is constrained by valuation rules. As soon as the Government announced the grants available, some of the contracts between the local authority and the tenant or the owner-occupier fell through because the owner-occupier believed that the local authority should pay more.
The Government say constantly that allowances for Airey houses are contained in the HIP allocations, but there is no evidence to support that statement. If there is an allocation in the HIP programme, the spiralling downwards of the allocations is far worse than we believed. There is pressure on other housing activity, which is reaching breaking point in my authority. But because of the financial implications of the replacement of the Airey house, and because the local authority decided, rightly, that one of its main priorities was to replace the houses, new building has stopped, improvements have gone further back and slum clearance has been stopped.
As the Airey houses were built as a result of a Government initiative, it is up to the Government to assist the local authorities with the problem that they have inherited. The Government have accepted responsibility for those houses, through the announcement in September 1982. If the Government are to be fair to the public sector, they should consider three matters. They must allocate specific additional capital. That could be accomplished under the specific provisons made in the improvement


grants that are coming into force. Local authority tenants could be permitted to apply for a grant as they do for improvement grants. If the Department of the Environment wishes to control the additional allocation, it could remove the element from the general consent to borrow and make approval subject to project control form submission.
The Government could also make specific Housing Corporation allocations to housing associations. At present, the housing associations are dependent on finance from the capital receipts of local authorities. The Government continue to hound the local authorities about the use of capital receipts. If they must use their capital receipts to finance everything that they wish to undertake, they will run out of money very quickly. My local authority has put aside money to replace Airey houses, but the Government are putting pressure on local authorities to use capital receipts. If they do not do so, they will be penalised, so what will happen to the Airey house programme during the next 10 years?
That is something that the Government could do to assist local authorities. They could provide revenue support for the net annual revenue costs of all necessary work and they could continue to be liable for all buildings. Although a house may have been pulled down, there may still be 30 years' mortgage repayments on it. That is a cost additional to that of replacing it with a new house. The Government have inherited responsibility for the Airey houses. Although they have treated the owner-occupiers generously—I applaud that—they should consider carefully their treatment of the local authorities. The financial burden of the replacement of the Airey houses is crippling my authority and shoving everything that we have looked for further and further back.
I have been considering the Barnsley side of the authority, but I should also mention the Sheffield side, which has 264 Airey houses. The secretary and research officer of the tenants' association, Leena Jones, talks about getting
equal treatment in terms of financial assistance for local authorities
and adds:
We feel that the Government is treating us as second class citizens not entitled to the same consideration and assistance as owner occupiers.
That is what we find all the way through. The local authorities are doing their best to rid us of the problems associated with the Airey type houses. Considerable work and effort have been put in by valuable teams of councillors and officials such as the one of which I was chairman. They now need the backing of the Government, because without it local government finance will be crippled.

Mr. Arthur Palmer: It is inevitable, in a debate of this kind, that there will be a fair amount of repetition, but it is important that the Minister should understand that doubts about the completeness of his policy are being expressed all over the country and not from just one area.
I have always thought that the Airey houses in my constituency were reasonably popular with the tenants. When I get complaints—and I certainly get many—about local authority housing in Bristol, they come mainly from

the tenants of Victorian properties that have been acquired out of necessity by the local authorities over a long period. They do not come from the tenants of the specially built houses such as Airey houses. However, we must accept that serious construction defects and difficulties have been found in them, and those faults must be taken seriously.
My right hon. Friend the Member for Bristol, South (Mr. Cocks), the Opposition Chief Whip, is precluded by custom and practice from contributing to the debate. He and I went, together with the officials of Bristol housing department, to see one of the Airey houses that had been stripped to its bones. I confess that, not being a building expert, I could not see a great deal wrong with it, but I was told that unless action was taken—this was the view of the Government's experts—the house might collapse in the fullness of time.
As has been said already in the debate, the Government are rightly generous to the purchasers of the Airey houses, but they are far from generous to the local authorities which have been left with stocks of Airey houses which have now no great value.
My hon. Friend the Member for Bolton, West (Mrs. Taylor), who opened the debate for the Opposition, mentioned a figure of 330 houses for Bristol—I think the figure is actually 380—of which about 100 have been sold. The concern of the Bristol housing authorities is to know what they are to do with those tenanted houses if they are to be put in any kind of order, because the cost will fall on the other tenants of the city council. Indeed, the Bristol housing department has been so anxious that it asked my right hon. Friend the Member for Bristol, South and myself to make representations to Ministers at the first opportunity. We asked the department to make a list of all the difficulties which, from the local authority point of view, arise from the present incomplete policy of the Government.
We have been provided, Mr. Deputy Speaker, with a list as long as your arm of the authority's doubts and qualifications. I shall not dare to quote all the points as there would not be time, so I shall select one or two of them and pass the others on to the Minister in due course. Bristol city housing department states:
If Airey houses which have been sold are to be repurchased by the Bristol city council, funds will have to be allocated to pay their current market value, as the Government reimbursements will only cover the difference between the latter and the 'defect free' value of the house. In the majority of cases the local authorities will have to bear the whole cost of repairs in addition.
That is a substantial point. It continues:
As it could be said that there is no real market for these houses at present, assessment of 'current market value' could be a costly and time consuming exercise. Some provision for arbitration between the local authority and the owner, in the event of failure to agree on 'current market value', and 'defect free value' will be necessary—perhaps the district valuer
will have to make the decision.
Bristol city housing department raises a further point. It asks:
Will expenditure under the scheme count against the local authority's Housing Investment Programme Allocation?
That important question must be answered.
Bristol city housing department continues:
Some Airey houses will still be subject to a pre-emption clause, and the clause limiting the resale price. Repurchase in these cases and ex gratia payment arrangements might not be appropriate.


There is a very large ownership of council houses in Bristol going back many years. I can sum up the problem in the words of the Bristol city housing department:
Although the proposals made by central Government rightly seek to protect the interests of purchasers of Airey houses, there is no commitment to protect the interest of the local authority tenants who, in the absence of a rate fund contribution or central Government subsidy, will have to meet the whole cost of the repairs through the Housing Revenue Account.
Those are substantial points raised by an experienced and responsible local authority housing department. The Minister should make haste to reassure local housing authorities that their grave doubts and worries on Airey housing in this new situation will be put right.

Mr. John Evans: In the only part of the speech of the hon. Member for Lichfield and Tamworth (Mr. Heddle) with which I agreed, he said that purchasers of Airey houses could not have known of the built-in defects in their houses no matter how prudent and careful they had been at the time of purchase. I press those words on the Under-Secretary of State because those words apply precisely to other forms of systems-built or prefabricated houses. They certainly apply to the houses to which I drew his attention in correspondence—the Parkinson frame houses. There are many other types of development with which there have been problems. I am sure that the House will return to this again and again, in Question Time, in Adjournment debates and in debates on housing policy because the Minister knows that far from being unique—the words he used both in a letter to me and in response to my earlier intervention—there is nothing unique about the Airey houses. The problems are symptomatic of many other houses.
I should like to concentrate on Airey houses because there are 60 or 70 such houses in my constituency, which were built by Warrington rural district council some years ago in some of the most attractive villages in my constituency. They have been taken over by Warrington borough council or Warrington district council and about 15 of the houses have been sold.
I welcome the order and particularly the Government's decision to extend grant payments to individuals who purchased their houses between 14 May 1981 and 7 September 1982. Two or three of my constituents in that category were extremely worried and they now know that they will qualify for assistance.
Of course, the order applies only to those who have purchased their houses. It is significant that the hon. Member for Lichfield and Tamworth did not refer to local authorities and their tenants. Hon. Members on both sides have asked repeatedly about the position of councils and their tenants who will have to foot the bill.
I understand that Warrington borough council has an allocation of £40,000 for Airey houses in its HIP allocation. I am not sure what it is supposed to do with that money. We do not know whether the council can use it for repairs to its own Airey houses or whether it is for the repurchase of Airey houses. In either case, it is not enough.
Clearly, the burden will be borne by Warrington tenants with no assistance from the Government. The policy of the borough council has been that charges for repairs, maintenance, management and so on should be borne by

tenants. Unless it changes its policy, tenants will have to pay the cost of dealing with the council's stock of Airey houses.
Three years ago, Warrington district council, a most prudent housing authority, received £2 million from central Government for its housing account. It now receives not a single penny. There is no question of Government assistance; the cost will have to be met by council tenants.
The Airey houses have been built on blocks of two, four, six, eight or 10 and are fairly widely scattered. In Warrington only one or two houses in such blocks have been sold. If an owner accepts the Government's generosity and has his house put right, but the local authority decides that it cannot afford to make good the defects in the rest of the block and moves out the tenants, will one or two owner-occupiers be left in a derelict block? Alternatively, if the council decides to modernise the block it will face a potential cost of £10,000 per house.
The hon. Member for Lichfield and Tamworth accused my hon. Friend the Member for Bolton, West (Mrs. Taylor) of using sensationalist figures, but my hon. Friend and I got the figure of £10,000 from the Under-Secretary.

Mr. Joseph Dean: The circumstances that I quoted regarding the letter that I received this morning were a carbon copy of the circumstances described by my hon. Friend. There are houses in my constituency which are not Airey houses. They are interdependent, in rows, and some have been sold. The corporation is finding the money to put right the structural defects on its own. The quantification for those who have bought the units to put theirs right is £10,000. The corporation does not have the money and is not going to get any.

Mr. Heddle: I accept that the hon. Member has used the figure of £10,000 because that is the maximum figure to which my hon. Friend referred. However, I ask the hon. Gentleman, and the hon. Member for Bolton, West (Mrs. Taylor), to produce evidence that the cost of revitalising these properties is necessarily as high as £10,000.
I should be happy to produce for the hon. Members figures from construction companies such as the Shepherd Construction company of York, and Taylor Woodrow Construction (Midlands) Ltd. of Stafford, that have carried out extensive research in South Wales, Staffordshire, Barnsley Penistone, the Don Valley, and Leeds, that show that the average cost of putting even the more serious examples of these properties into good habitable and mortgagable repair is about £2,500 to £5,000.

Mr. Evans: I advise the hon. Gentleman to take seriously some of the letters that he receives from building organisations. Up and down the length and breadth of Britain, local authorities are pulling down properties that building companies guaranteed would last for 60 years. Most people who have been in local authority for any length of time have cause to regret some of the statements that they believed from building organisations.
I point out to the hon. Member for Lichfield and Tamworth that until such time as the Minister takes up the point made by his hon. Friend the Member for Ilford, North (Mr. Bendall) and conducts and finances a full structural survey, none of us will know precisely how much the cost will be. That is why we are entitled to use, not our figures drawn from thin air, but the Minister's figure of £10,000.
In the case of Warrington we are faced with a potential bill of over £500,000 to repair the Airey houses, on the Minister's figures.

Mr. Allen McKay: That is what Barnsley council did. It took and examined each and every house separately to decide what was wrong with the house. We found, for example, that in one area, of the 18 houses there, 260 posts, or 60 per cent. of the posts used, were broken, and the houses had to be pulled down. Will my hon. Friend take into consideration the fact that in repairing houses one can clean the windows and put new curtains in, or one can clean the windows and put the old curtains back? That is the difference in money.

Mr. Evans: I am grateful to my hon. Friend. I am sure that all hon. Members will take notice of what he says on this subject, because he has as much experience as any other hon. Member.
What happens if the council persuades purchasers to sell their properties back to the local authority, and then, because of the colossal cost involved with the potential problems, to which the hon. Member for Ilford, North rightly drew attention, the local authority demolishes the block? What does it put in its place? As long as there is a Tory Government with their ridiculous right-to-buy hung around the necks of local authorities they would be lunatics to build semi-detached houses, because they would be faced with having to sell those houses in three or four years' time at colossal cost to the ratepayers and the taxpayers.
I suspect that, because of the special nature of the sites involved, which are small sites of two, four, six, eight or 10, the costs would be exceedingly high, and we could be talking of anything up to £20,000 a year to be put back. The only thing that a local authority can do in these circumstances is to put old age pensioners bungalows on the sites, because they are not covered by the right-to-buy provisions. But if we do that, what do we do with the people at present living in the houses in these villages? They have lived there for many years, and their children go to the village schools. There are no other council houses in the villages that I represent. Where do they go? Do they have to accept council houses in central Warrington, miles from their employment, their children's schools, their friends and their families?
The Government have not thought through the problems involved. It is all very well to treat 2,000 out of 24,000 or 26,000 people generously and ignore the remainder, who still depend on the local authority for their housing. Unless the Minister returns to this theme and approaches the problems in a more rational and reasonable way, he will be creating enormous difficulties for the future. His only sensible course of action is to tackle the problems of all prefabricated houses, including the Airey houses, on a rational basis by conducting the sort of survey suggested by the hon. Member for Ilford, North, and then presenting to the House the bill which will have to be incurred if we are to make these houses reasonably habitable again. If he does that, he will get the Opposition's support for the order. He will also get our support to carry out a wider and much needed housing programme.

Mr. Michael Welsh: I have a great interest in the subject-matter of this debate, because I shall have an Adjournment debate next Monday on the Airey houses in my local authority area. I thank hon. Members on both sides of the House who have contributed to this debate, because their speeches will make the Minister more aware of the problems being experienced by local authorities and may persuade him to come up with a different answer from mine when I raise the matter on Monday. The House may have the rare experience of seeing the Opposition win an argument.
I welcome the order, so far as it goes, although I do not welcome the money part of it. However, the hon. Member for Lichfield and Tamworth (Mr. Heddle) spoke of a clean bill of health for these houses. I remind him that the National Coal Board's surveyors and architects gave tenanted houses in Doncaster a clean bill of health, and several tenants decided to buy their houses, only to find that no building society would grant them mortgages.
The Minister has before him a letter from me on behalf of a Mr. Sutton, of Campsell, who has been told by the Halifax Building Society that it will not give him a mortgage and that if he spends what the Minister says he will allow it is still doubtful whether a mortgage will be granted. I am awaiting the Minister's reply to my letter. I am sure that he will be writing to me as soon as he can, because this decision of the building society is a very serious matter, yet the Suttons got a clean bill of health when they decided to buy their house, and there are 197 similar houses in the Doncaster metropolitan borough.
The trouble with the order is that it makes insufficient money available. People who have already bought their houses—and I hope that no more decide to do so until their properties are brought up to a standard which is considered reasonable by a building society—find themselves saddled with a big headache, despite their houses having been given a clean bill of health, and one cannot but feel extremely sorry for them. We must help them all as much as possible. I am sure that that is the Minister's intention.
We hear that the proposed grant was increased even before it came before the House from £9,000 to £10,000, and that is very acceptable, even when we consider that in London it is to be £14,000. But everything depends on the 90 per cent. about which we have been told. Very few people in the country who have rehabilitated their houses have got the full 90 per cent. of the present hardship figure of £8,500. So it is possible to get less for refurbishing an Airey house than people are getting under the old system, because of the break-up of the grants. With repair grants one gets a certain amount for certain items.
No authority could be more benevolent to owner-occupiers than Doncaster. I was chairman of the technical services committee which comes under the public health department. I and my committee said that we should be as generous as possible to owner-occupiers who wanted revitalisation grants, and that where there was any doubt the grants should be given. I believe that I was right. Governments of both parties allocated these grants but few got the full grant because of the way it was broken down and allocated. One has to fill in long lists. One gets so much for a kitchen sink, and so much for other items. With Airey houses it is a matter of big structural damage, not


repairs as such, and for that reason people get less under this generous-looking grant than in the case of pre-1965 houses, which received £8,500.
Perhaps the Minister will have another look at such cases to make sure that people do not suffer. It is a matter that must be borne in mind when seeking refurbishment grants. The matter cannot be worked out by rule of thumb or by just looking at it. It has to be worked out correctly and attract allocation.
I am surprised that the £10,500—90 per cent.—is good enough. I and my hon. Friend the Member for Penistone (Mr. McKay) were involved in a full-scale survey of one such house. Even the girders were eaten away. One could even put one's finger through them. No one is to blame. It was something that was not properly looked into at the time, and the Government of the day accepted it. However, the estimate to bring such houses up to a standard that would be acceptable for mortgage purposes is £15,000, and it may be higher. The director of housing, who eventually has to find the money in some way or other, could give a complete breakdown. A sum of £15,000 or more is necessary to make the properties acceptable for building societies to give mortgages.
If the sum that is needed is £15,000, and we are allowing only 90 per cent. of the £10,500, it means that people who want to bring the properties up to standard would then have to find a considerable amount of money—about £6,000. If people want to sell the property later, or leave it to their children, they will have to take out another mortgage. This is the Catch 22 situation, as the hon. Member for Lichfield and Tamworth said. They cannot get a second mortgage because now they cannot even get a first mortgage. They could not get a second mortgage, over and above the allocation, because the building society would not give one. The Minister may tell me that I am wrong, but I do not believe that the local authority would give a second mortgage—or would have great difficulty in giving a second mortgage—on properties on which building societies would not give a first mortgage. That is a terrible situation for these poor people to find themselves in.
Therefore, this order may not help a lot of people. The grant is not enough. If people cannot get another mortgage, it is no good having the property repaired. It is no good patching good stuff on to bad stuff, because it breaks away and is not worth doing. That would be very bad. Most of the people in my area have bought their houses from utilities like the National Coal Board. I wonder whether the local authority will have to buy back the houses under the generous terms that the Minister stated.
On many issues, equity under this Government is not apparent. Money is available for houses built before 1963 because the structure is sound. A mortgage can be obtained. Hon. Members should be seeking to ensure that those with Airey type houses also receive enough money to enable a mortgage to be obtained at a later date.
Some structures of Airey type houses in the Doncaster area leave much to be desired. Those who have bought such houses face difficulties. I hope that the Minister will be able to re-examine the position to ensure that people who, by accident, have bought the worst houses do not suffer. It is a strange world when owners who repair their houses may still be unable to sell them because a mortgage

cannot be obtained. If they do not make repairs and the houses cannot be sold back to the authority, their position will become worse through no fault of their own.
The Minister should allow a grant that is big enough to permit the houses to be revitalised and gain a certificate guaranteeing that a mortgage will be available for anyone wishing to buy them at a later date. That is what the owners of the houses want. I hope that the Minister will be able to produce such a scheme.

Mr. Stanley Newens: The order has been eagerly awaited by Airey house owners in my constituency. Ever since they first discovered that their houses could be subject to serious defects they have experienced considerable worry. I am anxious that the order should be implemented as soon as possible.
There are a number of Airey houses in Harlow and adjacent areas, but in only a few of them is there any evidence of serious faults. I want to address my remarks to the hon. Member for Lichfield and Tamworth (Mr. Heddle), because that does not signify that the owners are not faced with serious problems. All those who have purchased Airey houses have found that they are blighted and that it is impossible to sell them. Building societies do not just refuse to advance a mortgage to people who inquire about buying them; they will not even send a surveyor to inspect the property.
In those circumstances, owners are trapped and cannot move. It is difficult to sell some houses in the present economic climate, but it is impossible to sell Airey houses. It is not good enough that local authorities have the option of purchasing or providing the help given by this order. I believe that the Minister must reconsider carefully that aspect of what he proposes this evening.
If any local authority fails to avail itself of the powers to purchase or make the grants provided for under the order, owners who live in that local authority area will be severely penalised compared with owners of Airey houses in other areas. I do not necessarily blame the local authorities. Some of my hon. Friends have pointed out the tremendous difficulties with which local authorities are faced. The order does not assist Airey house owners who are faced with a local authority which refuses to purchase. The order is not clear enough.
In my view, the policy of selling council houses is bound to give rise to such problems. On this occasion the Government are anxious to state that they are not legally liable and that the payments are ex gratia and not a precedent, because they are aware, as some of my hon. Friends have said, that there are many other houses that are subject to structural defects. I believe that one of the aims of selling council houses is to shrug off responsibility for repairs and maintenance. Airey houses illustrate that that policy is fraught with problems for those who decide to buy.
I wish to raise another point that has not been clarified. What is the position of the owner who does not avail himself now of the right to which he is entitled and discovers in 10 years time or later that his house has a structural defect? Will he still be eligible for the grants and the arrangements that prevail now? It is important to clarify that, because all hon. Members know that we sometimes meet individuals who, for one reason or another, have not taken advantage of their rights at a


particular time. We need to know whether there will be any time limit on applications for grants for repairs and the right to purchase.

Mr. Bendall: I support the hon. Gentleman on that important issue.

Mr. Newens: I am grateful to the hon. Gentleman for his support. I am aware from his speech that in his constituency he has met many of the problems that I have met in mine.
I fear that, although we are discussing what appears to be a comparatively limited problem tonight, the problem of Airey houses is likely to be repeated in many other system-built houses over the years. In those circumstances, the problems of Airey houses may pale against future ones. Therefore, although I am anxious to support the order in so far as it goes, I want to point out that it is still grossly inadequate.
The Minister knows that I have had experience of the Government's policy for the new towns, where they have failed to meet their responsibility to remedy design defects in system-built houses. Although the scheme goes a certain way, it is not adequate, and I hope that the Minister will be prepared to consider some of the points that have been made by hon. Members.
I, and I am sure other hon. Members, will monitor matters carefully. If it is found that constituents are still suffering, we shall return to the Minister or his successor to demand an adequate scheme to meet the problems faced by the owners and occupiers of Airey houses.

Mrs. Ann Taylor: rose—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Does the hon. Lady have the leave of the House to speak again? [HON MEMBERS: "Aye".] It appears that she does.

Mrs. Taylor: At the end of this important and difficult debate, I want to put a suggestion to the Minister which I hope that the Government will think worthy of consideration. The Minister has listened carefully to the anxieties expressed by all hon. Members. There is a measure of agreement that the information that the Minister gave the House is inadequate because of the grave concern about Airey housing. The hon. Member for Ilford, North (Mr. Bendall), amongst others, has expressed such anxiety.
In view of all that has been said, I suggest that the Minister should consider whether to withdraw the order and deal with the problem on a wider scale so that the problems of tenants as well as owner-occupiers can be taken into account and that he should think again about the limited assistance that is given by the order.
I hope that the Minister will not simply stick by his earlier statement but will genuinely consider the points that have been raised. He would have the full support of Labour Members if he were to withdraw the order and bring it back later on a far wider basis.

Sir George Young: I am somewhat surprised by the latest intervention of the hon. Member for Bolton, West (Mrs. Taylor). Every speaker in the debate has welcomed the order which the Government have laid before the

House. Not to proceed with it, not to enable owners of Airey houses to have the support that everybody has agreed they should have, would be far from productive and would not be welcomed at all.
In the course of my remarks I shall deal with the wider issues which the hon. Lady has raised about the assistance available to local authorities, but I do not think that her hon. Friends would welcome any delay in the extension of assistance to those who have bought Airey houses. Indeed, when the hon. Lady spoke at the beginning of the debate she said that this was an act of unprecedented generosity. Modesty prevented me from describing the order in those terms, but as she has done so I think that that is an apt description and a compelling reason why it would be wrong to withdraw it.
The hon. Lady raised an important issue, and it was also raised by many other hon. Members. She asked why private owners are different from local authority owners of Airey houses. Today's debate has been a knock-up for the debate which the hon. Member for Don Valley (Mr. Welsh) will have on the Adjournment in exactly a week's time, when he will raise the subject of assistance for local authorities which are owners of Airey houses.
Perhaps I might anticipate that debate and attempt to deal with it. Public bodies, such as local authorities, already receive public funds. The resources that are available to a local authority to tackle these problems far exceeds those that are available to an owner-occupier. The Housing Act 1980 makes local authorities' costs for capitalised repairs eligible for subsidy. In determining the HIP allocations the Department's regional offices take into account, where appropriate, the incidence of need for work on Airey houses in the same way as any other special local need. One hundred per cent. of the national loan charges on the qualifying costs, which is 70 per cent. of the admissible costs, will be reckonable expenditure and will count in the calculation of local authorities' subsidy entitlement. That is why there is a difference between the owner-occupier and the local authority. The former does not at the moment have access to public funds, whereas the local authority does.
The hon. Lady asked me about discounts. If she examines the Housing Act 1980, she will discover that an owner-occupier who sells his Airey house back to the local authority is not entitled to count for discount purposes the years that he may have counted for the original purchase. Therefore, he is not entitled to count the years twice. The cost floor provisions may bite if the costs of putting the Airey house back into good condition is as high as some hon. Members have suggested.

Mrs. Ann Taylor: Does the right hon. Gentleman agree that there is a difference between those who fall under the right-to-buy legislation and those who bought before 1980, when local authorities were willing to sell without any special legislation? Does he also agree that those who sell their homes to local authorities and then buy them back if they are resident for three or five years before they operate their new right to buy will qualify for the full discount on the period since the repurchase by the local authority?

Sir George Young: Yes. The hon. Lady is right, but that is subject to the cost floor provisions, which would stop the local authority making a loss on the transaction.

Mrs. Taylor: I apologise for intervening again, but is the Minister now saying that the full cost—the current market value—which the local authority must pay the owner of an Airey house would become a new cost floor? If not, surely the cost floor would be the low cost of when the house was originally built?

Sir George Young: I shall write to the hon. Lady if I am wrong, but the cost floor for calculating the second sale is not the defect-free price but the price that takes account of the defect when the local authority bought it back from the owner-occupier. Otherwise, I agree, it would introduce a high cost floor that would be unrealistic in the light of the property's condition.
The hon. Lady asked whether houses that are sold by other public bodies will be eligible for repair grants from local authorities. They will be eligible.
Several hon. Members asked why we had singled out Airey houses for this treatment. The hon. Member for Newton (Mr. Evans) was one. The Airey house is unique. Not only is there a risk to human safety from a concealed design fault, but it is a risk that can be present at any time, which affects a substantial number of owners and which potentially involves them in unusually costly repairs. It therefore seemed right to facilitate the early inspection of privately owned houses and remedial action as necessary by providing the owners with financial assistance in the face of potentially heavy costs. No other case that hon. Members have presented, today or in writing, has produced the same balance of considerations.
A few hon. Members asked about the likely cost of repairs. It would be misleading to give any amounts, as the cost will vary considerably. It would be wrong to give examples. The figures in the order are maxima and they are based on our assessment of costs on 1 January 1984. We hope that the cost in many cases will be substantially less.
My hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) referred to his Adjournment debate on 25 June last year. No doubt it was in part in response to his eloquence on that occasion that we have moved as we have done. The rateable values he asked about have been raised to take account of the importance of ensuring that everyone is eligible. We are satisfied that they are generous enough. We raised them after consultation with the valuation office. If by any chance somebody owns an Airey house that is over the top of the rateable values, we shall have a look at that. If that were the case, they would have quite a good reason for asking for their rateable value to be reduced in the light of defects in the property.
My hon. Friend the Member for Ilford, North (Mr. Bendall) asked about the costs of the initial survey on which he has written to me. Defects in the posts of Airey houses cannot be detected without a survey as they are hidden within the wall cavity except in a few places where they appear as window mullions, so two surveys may be necessary. The first survey is to establish whether the supporting columns are at risk and whether there is a problem worth serious investigation. That could be carried out at a small cost. If, following this initial survey, no repairs are considered necessary, the cost of the survey will have to be borne by the owner as there is no power to pay grant.
However, if works are considered necessary, a further major survey will probably be needed as a preliminary to

the repairs. If local authorities consider the subsequent repairs to be eligible for grant aid, they will doubtless consider the cost of both of the surveys leading directly to those repairs to be eligible for grant aid subject to the overall eligible expense limits.

Mr. Bendall: What would the Minister consider to be a small cost? The figure that I gave tonight of between £150 and £200 is not a small cost in relation to what would be considered a normal price for a structural survey of around £100 or just under.

Sir George Young: In the hypothesis that my hon. Friend puts forward, if somebody has a first survey carried out and no repairs are necessary, he has saved the 10 per cent. that he would have had to find out of his own pocket if he proceeded with the repairs. The owner of the Airey house has to find something out of his pocket. I suspect that the first survey cost might be less than the cost which he would have to find to make up the difference between the 90 per cent. and the totality. The object of the order is to extend assistance to people who have defective properties. If properties are not defective, the order does not extend assistance to them.
The hon. Member for Leeds, West (Mr. Dean) asked about the difference between private owners and public owners. I explained that briefly earlier on. If he is not satisfied with what I said, he may be able to pentacle his hon. Friend the Member for Don Valley to give him a minute or two of his Adjournment debate next Monday when we can return at greater length to the question of local authority owned Airey houses.

Mr. Joseph Dean: I do not see any point in repeating an argument. I raised the case of a person who has bought an Airey house living next door to a council house tenant with the same type of house, same length of tenancy and same income bracket. To both of those families that unit has one purpose only—it is their home; it is where they live. Why differentiate in favour of one against the other?

Sir George Young: The Government do not differentiate in the way suggested by the hon. Gentleman. We have made it quite clear that we will include in local authority HIP allocations for next year the costs of putting right the defective Airey houses. For the private owner, we are introducing special assistance in the order. Thus, the Government are making help available to both types of Airey houses. The assistance comes through different channels to reflect the different resources available to local authorities as against owner-occupiers. The Government are making resources available to owners, be they private or public, who live in Airey houses to meet their problems.

Mr. Allen McKay: What happens to the authority that is in receipt of a subsidy? If it is in the HIP allocation and the allocation has gone down since the Government came into power, it will merely reduce the allocation still further.

Sir George Young: The HIP allocations have been increased by the amount of money that those local authorities think is necessary next year to meet the defects in the Airey houses. That is how we have met their needs.
Several hon. Members asked what would happen if a local authority refused to buy. Local authorities have made it clear that they support the scheme, and I see no evidence whatsoever that they will refuse to buy back properties that


are offered to them. Indeed, they would be singularly bloody-minded if they did so as 100 per cent. of the cost comes back from the Government. I am sure that no Labour Member is suggesting that his own local authority would act in that way and inflict considerable hardship on someone in its area, given that there is no financial obligation on the local authority.
The limits are set out at January 1984 costs. There is no time limit on application for grant, but there is a time limit on the period during which people can serve notice on the local authority to buy back the home. That time is set out as 7 September 1985.

Mr. Newens: What will occur if an investigation shows that the building is apparently in a reasonable state of repair but something happens 10 years later that brings a structural defect to light? Is the hon. Gentleman saying that there will be no limit on the claim for grant? I hope that he is.

Sir George Young: Unless the House rescinds this order, the entitlement to grant will remain indefinitely. There is no time limit on that.
A number of the other points raised will be clarified in the circular to be sent to local authorities. This will deal with defect-free prices, which the hon. Member for Bristol, North-East (Mr. Palmer) raised. Perhaps I can deal with some of the other points by way of correspondence, but, in the light of the general support for the order, I hope that the House will agree that it can proceed.

Question put and agreed to.

Resolved
That the draft Grants by Local Authorities (Appropriate Percentage and Exchequer Contribution) (Repairs Grants for Airey Houses) Order 1982, which was laid before this House on 8th December, be approved.

PIG INDUSTRY LEVY BILL

Ordered,
That, in respect of the Pig Industry Levy Bill, notices of Amendments, new Clauses and new Schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a second time.—[Mr. Berry.]

Initial Teacher Training (Dartford)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Berry.]

Mr. Bob Dunn: I am delighted and pleased to have obtained tonight's Adjournment debate on the subject of the removal of initial teacher training from the Thames polytechnic Dartford site. The decision to do so, as announced and confirmed by my hon. Friend the Under-Secretary, was for those who know and admire the levels of excellence achieved at Dartford a bitter and significant blow—bitter because it was unexpected, and significant because the decision, if enacted, will end almost 100 years of physical education training at the Dartford college.
Since 1895, a quality and range of education opportunities for women, and from 1968 for men, have been offered and improved at the Dartford site, a known and nationally famed centre of excellence. I am conscious that in this debate I speak as Member of Parliament for the Dartford constituency, but I wish and hope to express the views of many thousands of people at local, regional and national level who have reacted strongly and are opposed to the decision taken by my hon. Friend.
On 8 November 1982, in a press notice, the Department of Education and Science announced its final decision on initial teacher training. In paragraph 6 on page 4 of the statement a list of criteria was published which the Department took into account when considering the distribution of places. There were 11 criteria, and it is our contention that, on the vast majority, if not all, Dartford college registered very well. The mechanics of registering have been brought to the attention of my hon. Friend on the two occasions on which he received deputations led by me.
Thames polytechnic Dartford college maintains two specialised teacher training courses—a BEd degree in movement studies, which is for women teachers in physical education, and a BEd (Primary) degree, which is a degree course for the training of teachers in primary schools, specifically in the Inner London environment.
Paragraph 3 of the press notice of 8 November, in the section entitled "Notes to Editors", states:
In its advice ACSET showed actual and projected pupil numbers for the period 1970ߝ1995. Primary numbers in England, which reached a peak in 1973 of over 4·6 million, are projected to fall to less than 3·4 million by the mid-1980s and then to increase. Secondary numbers in England, which reached a peak in 1979 of over 3ߝ8 million, are projected to fall to less than 2·8 million by the start of the 1990s and then to increase.
The two courses to which I referred will be wound down and will stop by the mid-1980s, at a time when, according to paragraph 3, the school population at primary level will start to increase. The birth rate has now been increasing for some years. The Advisory Council on the Supply and Education of Teachers recognises that, and the Department of Education and Science has accepted its advice. My right hon. Friend the Secretary of State is on record as saying that
the number of children in primary schools will begin to rise again in the mid-1980s. The logic of the situation impels us to treble the number of newly-trained primary school teachers.
In view of that statement and of the consensus that exists, it would appear to be wrong to close the Dartford site when there should be an increased recruitment of primary school teachers.
During the past few months my hon. Friend has been subject to much pressure. During that time he has been most courteous in his response and he obviously has a difficult decision to make. But I would not be here tonight if I believed that the last ditch was approaching. I wish to argue the case for the retention of teacher training at Thames polytechnic, and the case for the BEd(Primary) and the BEd (Physical Education) for women is strong. First, the degrees are designed to ensure the closest relationship between theory and practice. Secondly, a substantial programme of school experience proceeds through all years of the degrees. Thirdly, students, especially in the BEd(Primary) degree course, pay close attention to the multi-ethnic inner city school and its relationship with the community. Fourthly, there is also in the BEd2(Primary) course a close relationship between the School of Education and Teaching Studies and the ILEA Environmental Studies Centre at Horton Kirby.
Fifthly, the BEd(Primary) course covers the whole of the primary age range and the whole of the primary curriculum, so that students at Dartford are equipped to teach in both infant and junior schools.
Sixthly, the BEd (PE) course has been designed to take into account the latest thinking on such degrees, as expressed at the recent Sheffield conference. Finally, there are outstanding facilities for physical education at the Dartford site of the polytechnic.
The loss to north-west Kent and the loss to my own community of the Dartford college would be enormous, and I know that my hon. Friend will bear that in mind when he replies.
On 19 January, my predecessor in this place, Lord Irving of Dartford, raised in another place the future of the Dartford site. He received a reply from the Earl of Swinton which appears in the House of Lords Hansard for that day. Lord Irving spent a great deal of time outlining the history of the Dartford site since the arrival of Martina Bergman Osterburg in this country in the 1880s. In the Dartford site we have a unique institution, because it was the first institution of its kind in the United Kingdom. Very shortly we shall be celebrating the centenary of institutions initiated by Madame Bergman Osterburg in this country. It would be a paradox if in a few years we were to celebrate her centenary with postage stamps and other items of recognition having closed the pioneering college which she set up in Dartford in 1895.
All-party support exists against the decision to remove initial teacher training from the site. I have support from my own colleagues from north-west Kent. I have support from Lord Irvine, who is a member of the Labour party. The hon. Member for Woolwich, East (Mr. Cartwright) would have been here tonight to give me support but for a prior constituency engagement.
My hon. Friend and I live in the real world. I accept the difficulties under which he has been operating. If we cannot have that which I seek, perhaps we can seek something else. Perhaps he will allow ILEA to reschedule the number of places for physical education throughout the colleges, and therefore maintain a physical education presence at the Dartford site.
When Madame Osterburg died on 29 July 1915, she left the institution to the nation. Since that time it has passed, in the form of a trust, through a number of hands, finally ending with Thames polytechnic. It is for us in north-west Kent an article of faith that we maintain the physical education presence at Madame Osterburg's college. To do

less than that would be a gross injustice to a fine radical lady—radical in the non-Socialist sense—who came to Dartford and set up a pioneer course which is famous throughout the world.
I appeal to my hon. Friend to show us a small light tonight—if possible, a bigger light—and to comment on what I have had to say, and also on the massive public demonstration that he has received against the proposal to remove initial teacher training from the Dartford college of Thames polytechnic.

The Under-Secretary of State for Education and Science (Mr. William Waldegrave): I am grateful to my hon. Friend the hon. Member for Dartford (Mr. Dunn) for the courteous way in which he has introduced this short debate. He has been kind enough to say that we have difficult decisions to make. It has not been enjoyable for anyone to have to undertake them. Equally, those of us who have seen him in action in this House will not doubt the sincerity of his commitment to his constituency, and particularly the care that he has taken over the issue. As he has mentioned, he brought to me two delegations, which have argued the case, and he has also raised this Adjournment debate tonight. My hon. Friend has put before the House the basic context of the diminution of teacher training, which now seems to us to be necessary, faced with the demographic trends. I shall add one or two figures to the ones he gave.
In 1971 initial teacher training was undertaken in 42 universities and 184 public sector institutions. Between them, these institutions produced an output of 40,000 newly trained teachers each year. The Labour Government, realising that the commitment to teacher training was far greater than the country needed, reduced plans in 1977 to a system based on 31 universities and 76 public sector institutions in England and Wales, with a planned total of 39,000 initial teacher training students and 20,000 planned admissions.
There must still be further reductions. My hon. Friend referred to the advice that my right hon. Friend the Secretary of State received from the advisory committee on the supply and education of teachers. The advice pointed to a considerable reduction in the overall need for newly trained teachers, following the sharp fall in the birth rate and the school population, which is down by more than 1·5 million—or more than one-sixth—in the decade from the mid-1970s. We have concluded that planned annual admissions to initial teacher training courses should be reduced from 20,000 in 1981 to 15,650 in 1983 rising thereafter as we begin—as my hon. Friend correctly predicted we would need to begin—to increase the training of primary teachers. I emphasise that, in the respect that the Secretary of State departed from the exact advice of ACSET, he called for rather more of diminution in the training of secondary teachers thinking that, because we were training more secondary teachers than could sensibly be expected to find jobs—within limits we must provide a sensible choice for local authorities—we should cut the number of training places for secondary teachers but should increase, beyond what ACSET originally recommended, the training of primary teachers. We believed that the system could respond even more quickly than ACSET thought it could in that respect.
The savings in teacher training form part of the projected savings in higher education as a whole that the


Government have put before the House in two White Papers. In so far as resources remained in teacher training, as we think unnecessarily, there would be further savings to be found elsewhere. Equally, if we can tailor the teacher training system to what we see as the needs of the country, more resources will be available elsewhere for higher education as a whole. We came to the conclusion that with this roughly 20 per cent. cut overall in places it would simply not be educationally sensible to spread the remaining butter more thinly across a similar number of institutions.
The primary and secondary intakes now proposed for 1983, 1984 and 1985 will produce a total in 1985 of 27,000 initial teacher training students—about 20 per cent. fewer than was intended when the present system was designed. We therefore came to the conclusion that, if all institutions were not to become weak and the teaching group subjects too small, we had to diminish the number of institutions involved.
As I look down the records of entries in 1981, as opposed to planned targets, I repeatedly find groups of one or two students following particular options. The advice of Her Majesty's Inspectorate is clear on this matter; that is not educationally good sense. So we came to the conclusion that a smaller number of institutions should be involved in teacher training. Partly in our minds was the thought that when the demographic fluctuations, which would undoubtedly take place again in the future hit us—demographic change is always unexpected—and if we had fewer but on the whole rather larger centres, the capacity to alter size of intakes without doing anything drastic to the number of institutions would be greater. With some exceptions it has been our intention to try to concentrate resources in rather larger groups.
My hon. Friend knows from his experience in the Department the sort of discussions that we have undertaken and the painful exercise was carried out against the background to which he referred. There has been some misunderstanding about the way in which we used the criteria. We did not go down a checklist and tick off the criteria against a single institution. All the criteria were comparative. We had to look at the whole national system against the criteria and to look for arguments for adding to the basic system. We altered the original prosposals, because we concluded that some special cases should be added to the central system.
After the cutbacks of the 1970s it would be surprising if the remaining institutions did not score highly on most of the criteria. The ones that it might have been easy to withdraw had long since been withdrawn. All the remaining institutions were providing a valuable service.
The situation in physical education is in some ways even more radical than that in initial teacher training overall, not only because of the need to reduce the number of institutions, but because the European Commission's 1977 directive on equal opportunities for women compelled us to do away with sex discrimination in course intakes and to admit men and women to all physical education training establishments.
That meant that the size of a viable unit should be bigger—about twice the size. Apart from the educational benefits of larger units, the European directive compels us to move to larger units. That is what we have done. There were 34 institutions undertaking bachelor of education

programmes in physical education and that will be reduced to 10. The average intake will be almost doubled from 16. The intake at Dartford was below average—about 11 in 1981.
I read with great interest the speech in another place by my hon. Friend's predecessor as hon. Member for Dartford who movingly outlined the history of the Dartford college. I am sure that the influence of what has gone on at Dartford has spread through physical education not only in this country, but world-wide.
I can say, without raising hopes or expectations too high, that it is not inconceivable that some physical education could continue with the existing facilities. We are willing to consider any proposals—the obvious source is the Avery Hill college—for the use of the facilities. In terms of London higher education establishments, the distance between the colleges is not all that great, though there would be some inconvenience, and I could see advantages to Avery Hill in using those facilities. We would put no obstacle in the way of practical proposals to use those facilities. I do not want to be misunderstood as saying that we should return to the Thames polytechnic for an entry quota, but we should be prepared to—

Mr. Bob Dunn: Is my hon. Friend saying that it would be up to ILEA to make proposals, for the Thames polytehnic, and that those proposals would involve some rescheduling of the ILEA umbrella, especially in south London?

Mr. Waldegrave: I am saying that we would not want to reschedule entry targets between institutions, but if ILEA or Avery Hill as an institution, made proposals for the use of the Dartford college facilities, we would put no obstacles in the way of that. To some extent, one can see, as can those who appreciate the history, as my hon. Friend does, and as his predecessor does, that there would be some satisfaction in seeing the activity continued on the site. I repeat that I am not saying, I am afraid, that we would want to, or are in a position to, return to the Thames polytechnic for an entry quota.
We did not give the distribution of the places, whether in physical education or, more broadly, in initial teacher training, between the various institutions of ILEA to ILEA as an authority—which is a proposal put to me by ILEA—because, although we considered the idea and discussed it with ILEA representatives, the Secretary of State, I and senior officials, came to the view that we could not properly fulfil our duty if we simply devolved to another authority the difficult choices involved.
We have the duty not only to judge, on the advice of the inspectorate, and other advice, the quality of what goes on in the colleges; we also have the duty, which is without the capacity of ILEA to undertake, to try to make a strategy across all three sectors—the voluntary colleges, the university and the local authority. That was why,'after toying with the idea and discussing it with ILEA representatives, we felt that we had to undertake the thankless task of making the decisions ourselves. That is what we have done.
I repeat that in this case the potential advantages of a liaison between Avery Hill and the Dartford site are attractive. In that sense the intentions of Madam Osterberg's will would, if they were to come about successfully, be met. My advice is that in strict legal


terms, the proper excercise of statutory powers by the Secretary of State, can, with the advice of the Charity Commissioners, alter the terms of the will.
I am grateful to my hon. Friend the Member for Dartford for giving me the opportunity to give an encouraging sign of co-operation. However, on the broader front, in terms of the reorganisation, which we all hope will be the final one—teacher training has had three periods of reorganisation over the past 10 years. We have provided the nation with a well-founded system that will mean that we are in a position to respond flexibly to the future.
In terms of the general structure, I do not wish to give my hon. Friend any hope that we can be persuaded to restore initial teacher training as a whole to Thames polytechnic. We could do that only at the cost of

weakening other institutions or of diverting resources, for which there are pressing needs elsewhere in the higher education system. We would be training people in skills for which we are already training more than car, find jobs at the secondary level. The resources, the students of the proper quality, will not be available to increase even faster than we are at the primary level.
It is the intention of Ministers to stand on the final decisions that have been taken, although where there are intelligent things that can be done at the margin to make the best use of resources we shall be willing to listen and help. I am grateful to my hon. Friend for giving me the opportunity to say so.

Question put and agreed to.

Adjourned accordingly at eleven minutes to Twelve o'clock.